My girlfriend and her son are going to move in with me into the house that I own (well mortgaged). She is going to give me $600 towards bills and running the house and deposit that once a month to my checking account.
There is no rental agreement to be set up as we do not deem this a rental and we will be sharing all rooms and my bedroom as a family. We are taking the single payment approach as all bills are all in my name and we think its the simplest way for us as an unmarried couple.
Question 1: I believe this is considered cost-sharing and I do not need to report anything on my tax return in terms of rental income (600*12 months). Is my understanding correct or could the IRS consider this rental income because of the monthly deposit?
Question 2: Because there is no rental agreement and a nominal amount I assume now my girlfriend can no longer claim head of household as she no longer rents - Pretty sure on this but just checking?
Notes:
- Girlfriend is not looking to claim anything against mortgage or interest as she is not named so that is not part of this question. Only concerned around "rental income" aspect of her deposit towards bills
- Not looking to claim her payments as rent on her state taxes as in Florida either.
- I'm not looking to claim her son as a dependent she will file desperately. assuming now Single
