renting rooms and taxes - Chicagoland Sportbikes
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post #1 of 21 (permalink) Old 03-28-2003, 02:29 PM Thread Starter
 
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renting rooms and taxes

Alright so I finally found a roomate and I might be picking up a second one. (I have 3 bedrooms). Do I need to claim this as income??? If I have 2 roomates, it will amount to an additional $7800/year, but their rent includes utlities. I will not be profitting off of this, but it will reduce my housing expenses such that all I'll be paying is half the mortgage...which is mostly equity anyway. Any thoughts?
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post #2 of 21 (permalink) Old 03-28-2003, 02:43 PM
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if they are not asking for rent reciepts...you hear nothing, see nothing and say nothing. Even if they were asking for reciepts, I wouldn't say a word, unless someone rats u out the IRS wont know.
post #3 of 21 (permalink) Old 03-28-2003, 02:43 PM
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Yes, you'll have to report the rent you receive from your friends on your tax return.

You can get some deductions not exceeding the rental income you receive. To get this deduction you have to go through a calculation to determine the percentage the apartment was used as a rental unit and the percentage the apartment was used as your principal residence.

You might want to check out Section 280A of the IRC if you want to find out more about this subject.
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post #4 of 21 (permalink) Old 03-28-2003, 02:58 PM
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For a mere $500 I will not say a word to the IRS....

DOn't be silly....what roomates?
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post #5 of 21 (permalink) Old 03-28-2003, 03:03 PM
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because they are roommates, and not renting the entire place out, i wouldn't really worry about it either.
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post #6 of 21 (permalink) Old 03-28-2003, 03:05 PM
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$325 a month!? Thats cheap as hell. I hope you at least rented to a chick....they make the best roomates if ya know what I mean

Serioulsy I rented to a girl for 3 years when I had my condo in Glen Ellyn...great roomate.
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post #7 of 21 (permalink) Old 03-28-2003, 03:30 PM
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TaxMan - Cherry does not own an apartment building... he is renting out his spare bedrooms.

I don't think you have anything to worry about. Just be careful where you mount the spycams!

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post #8 of 21 (permalink) Old 03-28-2003, 03:44 PM
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Talking

Quote:
Originally posted by KBOlsen
Just be careful where you mount the spycams!
IRS encourages "whistle blowing" and I might even get some credit for that.

Cherry wanted to know if IRS requires him to report the income and it does.
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post #9 of 21 (permalink) Old 03-28-2003, 03:44 PM
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No way man. If it comes down to it...they are paying for the utilities and food.

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post #10 of 21 (permalink) Old 03-28-2003, 03:47 PM
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Quote:
Originally posted by Kruz
Serioulsy I rented to a girl for 3 years when I had my condo in Glen Ellyn...great roomate.
I agree!! I'm buying a condo in the city in August and I've already got a roomate, a girl ofcourse.
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post #11 of 21 (permalink) Old 03-28-2003, 03:48 PM
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Dude its just rent, I wouldnt worry about it, its not like they are gonna be trying to write it off. just take thier money and be done with it.




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post #12 of 21 (permalink) Old 03-28-2003, 04:28 PM Thread Starter
 
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Thanks for the input... I was just checking. Something like 10% of my income already goes towards interest.... I don't need to make my life any harder.

If I claim rent from my roomates... then I'll claim trackdays as a business expense for advertising and entertaining potential customers

There won't be any reciept invloved...as far as I'm concerend it's for utilities and maintenance.... which is actually what I'm goign ot use it for.
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post #13 of 21 (permalink) Old 03-28-2003, 04:30 PM
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OK. next question.
I purchased some 40 LP records(before cd's ) at the Les Turner Benifit for ALS. Can I deduct this amount from my taxes as if I did donate to Diabetes Marathon?

Thanks.
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post #14 of 21 (permalink) Old 03-28-2003, 04:33 PM
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Besides the taxes Cherry, who are the roomates and do they ride?
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post #15 of 21 (permalink) Old 03-28-2003, 04:45 PM
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Quote:
Originally posted by Beef
Besides the taxes Cherry, who are the roomates and do they ride?
in this order:

chicks
dicks


JUST KIDDING (gawd this day can not end any faster)
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post #16 of 21 (permalink) Old 03-28-2003, 08:38 PM
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Quote:
Originally posted by TaxMan


IRS encourages "whistle blowing" and I might even get some credit for that.

Cherry wanted to know if IRS requires him to report the income and it does.
The other thing you will want to consider is that if you get audited the IRS may look at your cash flow and question how you could afford your lifestyle without the unreported income.

In addition to utilities, you can probably pro-rate the insurance and home repairs. I know - I did the same thing you did. A good tax person can find what can be deducted or not.

Additionally, I don't know what other items you would put on your schedule A, but you may end up paying less if the interest/taxes is pro-rated and deducted from rental income on your schedule C and you take your standard deduction on your schedule A. I don't know, you will have to crunch the numbers with a tax person.

Besides, for the peace of mind, is it worth cheating over a few bucks (which is what it would probably amount to after the expenses are deducted from the rental income)?

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post #17 of 21 (permalink) Old 03-31-2003, 10:18 AM
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Quote:
Originally posted by Jughead

I purchased some 40 LP records(before cd's ) at the Les Turner Benifit for ALS. Can I deduct this amount from my taxes as if I did donate to Diabetes Marathon?
If you're using those records then it will not qualify as a Charitable Contribution. IRS will treat it as if you bought it from any other store.
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post #18 of 21 (permalink) Old 03-31-2003, 10:56 AM
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Quote:
Originally posted by TaxMan
If you're using those records then it will not qualify as a Charitable Contribution. IRS will treat it as if you bought it from any other store.
Part may qualify though (example if he paid $100 for a $15 cd, the difference would be considered charity), but it sounds like he paid FMV.

Look, I can appreciate this. I was young too, I felt just like you. Hated authority, hated all my bosses, thought they were full of shit. Look, it's like they say, if you're not a rebel by the age of 20, you got no heart, but if you haven't turned establishment by 30, you've got no brains. Because there are no story-book romances, no fairy-tale endings. So before you run out and change the world, ask yourself, "What do you really want?"
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post #19 of 21 (permalink) Old 03-31-2003, 11:11 AM
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That's true. I started to type those details (diff b/w FMV and the price he paid) but decided not since I didn't think he paid more than FMV.
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post #20 of 21 (permalink) Old 03-31-2003, 12:39 PM Thread Starter
 
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Quote:
Originally posted by Norseman82
The other thing you will want to consider is that if you get audited the IRS may look at your cash flow and question how you could afford your lifestyle without the unreported income.

Including the condo, my debt is 3 times my annual income. I'm not exactly oozing cash. I'm under teh $75k radar which I hear is the cut-off for audits to be profitable.


I'll consider reporting it when tax time comes aroudn next year.


Who here reports all of their OOS internet purchases on their state taxes..... everyone cheats a little. It's part of the game.

Last edited by cherrypicker; 03-31-2003 at 12:43 PM.
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post #21 of 21 (permalink) Old 03-31-2003, 12:55 PM
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thanks Taxman + BanditCPA bummer
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