@Gary39 wrote:
Thanks. I am asking on my sons behalf (he is the homeowner with the roommate). It would not be advantageous for him to treat this as a rental and depreciate a part of the property, because he is in a low income tax bracket. Hence the tax on recapture (when he sells) would be greater than his current tax benefit from depreciation (plus it could expose him to capital gains on a future sale, if he doesn't re-qualify the entire property as personal use/residence for 2 years prior to sale).
Is this a true rental situation with a rental agreement or is this just roommates sharing expenses? If there is no rental agreement then it is just roommates sharing expenses and nothing concerning the funds received from the roommate is entered on a tax return.
