Should a net sublease income of 0 on Schedule E for 3 roommates, be reported separately or it can be reported on one return only?

[nk6472]

I subleased a vacant room in a 4 bedroom apartment on Airbnb for 150 nights. And split the proceeds with my roommates. I know I should report the rental income on Schedule E and offset it by rent paid to the landlord for that room as well as other expenses like cleaning. As costs were more than the gross income, the net income is 0 and we don't want to claim deductions. My question is: Can I, and only me, report the 0 income on Schedule E, or my other roommates also have to file Schedule E on their returns as well?

[Spino · Accepted solution]

In a situation like this, you can (one person) report all the income and all the deductions, and this is the best way to do this in my opinion. 

If you are splitting proceeds with your roommates (no need to do so this year!), you should then pay them and they should declare that income on their returns, while you subtract the expense of paying them on your Schedule E. Their schedule E's or miscellaneous income should show only this payment and no expenses. If you pay them over $600 each, you will want to also give them (and the IRS) the 1099/1096 reporting these payments.

Be careful about how you apportion shared costs. Keep records of how you calculated the rent for that room, cleaning expenses for that room, utilities, etc., so that if by some rare chance you are audited you will be able to explain any amount that is questioned. Save these records for at least three years, and preferably seven to be safe.