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How do I include rental income from receiving rent from a significant other (not married) in TurboTax that I also reside in? TurboTax prevents me from entering it.

I bought my house and have owned it for 184 days. My significant other moved in several months later, paying rent for a total of 92 days by the end of the year. When I type in the number of days owned (184), TurboTax won't let me continue because it says the number can't be less than the days rented plus personal use days. Essentially, I have to claim I owned the house for 276 days, which is a lie.

Every day I have owned this has been personal use because I live here, too. How am I supposed to enter this into TurboTax?
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4 Replies

How do I include rental income from receiving rent from a significant other (not married) in TurboTax that I also reside in? TurboTax prevents me from entering it.

This sounds more like two people sharing expenses for the home.  If this is the case then there is no need to report this on a tax return.

Hal_Al
Level 15

How do I include rental income from receiving rent from a significant other (not married) in TurboTax that I also reside in? TurboTax prevents me from entering it.

Lying to TurboTax to get it to do what you want does not constitute lying to the IRS.

 

But, you shouldn't be reporting this at all. 

 

Roommate  rental

If this is merely a cost sharing arrangement where the amount paid is below fair market rental, there would be no reportable income to you. If the “rent” amount is fair market value, or more, there is still some question as to whether you even have to report it, as it almost always comes out zero. Most people take the attitude that it is not income; it's just room mates sharing expenses and ignore it. Family (including significant other), as opposed to unrelated roommates, makes that position stronger.

 

Here’s what you may be required to do:

Report the income (enter at Rents & Royalties/Income & expenses from Rental Properties); and then deduct the expenses on schedule E. If the room mate has full run of the house, and there's just the 2 of you, then half your expenses are deductible (mortgage interest, property taxes, insurance, utilities, repairs, and depreciation [if needed}). Your net income will usually be less than zero.

What you are NOT allowed to do, because it is your own home (you have "personal use") is claim a loss from this activity, to offset other income. Because of the "personal use rule", your deductions are limited to your income. Net effect ZERO.

It is possible for you to gain a positive tax effect from this activity; If enough of your schedule A deductions (mortgage interest &  property tax) are shifted to Schedule E, and your standard deduction becomes bigger than your itemized deductions, you will have effectively saved on taxes.

How do I include rental income from receiving rent from a significant other (not married) in TurboTax that I also reside in? TurboTax prevents me from entering it.

"Here’s what you may be required to do:

Report the income (enter at Rents & Royalties/Income & expenses from Rental Properties); and then deduct the expenses on schedule E."

 

Do you know how I can proceed in reporting it as rental income? The program won't go forward unless I make up numbers regarding how many days I owned the property.

Hal_Al
Level 15

How do I include rental income from receiving rent from a significant other (not married) in TurboTax that I also reside in? TurboTax prevents me from entering it.

You have to force the numbers. Try entering 92 days rental and 92 days personal use (184-92=92).

 

 

Also be advised that TT will not limit your deductions to your income. You have to do that manually. TT wants you to enter this as a “not for profit rental”, which does not use Schedule E and no longer allows any deductions (starting in 2018).  I'm of the opinion that's not the proper way.

 

That said, why are you doing that?  You don't have a rental situation.

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