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Financial Planning / Tax Strategies


Subject:  Re: Taxes and roommates Date:  6/17/2013  2:55 PM
Author:  ptheland Number:  118703 of 127753

I was thinking that he would have the utilities in his name, so if he had 2 roommates, would he deduct 2/3 of the utilities as an expense? That seems to make sense to me.

Sure. Or depending on the facts of the situation, perhaps some other allocation method would work. (Maybe you buy a duplex, he lives in one unit alone and two people share the other - so he'd deduct 1/2 of the utilities instead of 2/3).

How would that work on having any portion of the rent deductible as an expense for him?

Same as the utilities. He's doing a sub-lease. So one of his expenses is the rent (or in this case, just a portion of the rent) he has to pay on the lease for the entire property.

I am thinking that all of this would be reportable on Schedule E for him. Is that correct?

Yep. Although I still prefer Bill's suggestion of you renting directly to the other roommates. But if you want to go this way, your son would report the income and expenses on Schedule E.

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