My monthly mortgage is over $1800 a month. I live in a 2 bedroom town house and have rented one bedroom to my friend for $800 a month.
Question Part I: Since this is all going towards mortgage, I'm making no profit off of it. Do I still have to report this rental as income?
Question Part II: If I do have to report it, would I say that 50% of the house is rented, since its 2 of us? I read on the IRS website, they gave the example that if you rent a 100 sq ft room in a 1000 sq ft house then you are only renting 10% of the house. To me this sounds like they are referring to a unit, where the tenant is confined to the room and potentially have their own entrance/exit to the house. In my situation, my friend and I share the entire house together, only we each have our separate bedrooms.
