I have a significant other (not married) than prefers to pay me a set amount each month for rent, and I pay for all improvements and repairs, basically like a landlord, if anything comes up. We live in a single family home in a shared space. There's no mortgage, and the home is solely mine. We do split the utility bills etc, and I plan on claiming no deductions. It's simply a situation where she prefers to pay a certain amount for her and her child to live here, and I guess that makes things easier for her. This qualifies as rental income as if I rented a room, but it's not a set area of the home, and I have no idea how to file that on a Schedule E. Would I put 365 days for both FRD and PUD? I benefit from claiming the rent so I'm not looking for loopholes or alternatives, I simply want to know how to fill out the Schedule E correctly in this situation.
edit: Once again, we are not sharing costs, and I don't want to claim any deductions or losses. I simply need to know how to fill out FRD and PUD. I'm charging a tenant a fair market value, but I also live in the home and there's no division of rooms etc. Anyone?...
It sounds like more of a cost sharing situation, rather than rental.
You may have questions about whether or not you should claim rental income received from relatives or friends that live with you, and whether or not you can also claim rental expenses. This depends on the type of rental agreement you have with the tenant. Think of cost sharing as charging your relative/tenant a small amount per month to help with groceries, utilities, or general household upkeep. The amount charged would be far less than market value for the rental on the open market. In cases like this, you would not report the income from the cost sharing, but you also would not be allowed to claim any rental expenses.
In Cost-Sharing arrangements, the Property owner cannot claim a Rental Loss. If you lose money because you are renting a property to a relative for a lower rate than you would rent it to other tenants, you cannot claim a rental loss. When your rental expenses are consistently more than your rental income, you may not be allowed to claim a rental loss because your rental operation is not considered to be a source of income.
However, you can claim a rental loss if you are renting the property to a relative for the same rate as you would charge other tenants and you reasonably expect to make a profit. In cost-sharing situations like this, the tenant will not be able to claim any tax benefit from Rent paid, or any of the Rental tax breaks provided, such as a portion of the Ontario Trillium Benefit.
If you charge a tenant fair market value for the rental, and expect to make some form of profit, you should report all rental income received, and you claim rental expenses consistent with the nature of the rental arrangement.