How to report rental property income on home I am not the owner of (Fiancé is on mortgage/deed but the rental income is deposited into my account)

[mlestrange626]

My fiancé and I bought a two-family home and rented out the top unit (we live in the downstairs unit).  His name is on the mortgage/deed (mine is not), but the tenants monthly payment is deposited into my account every month.  I then venmo my fiancé his half, plus what I owe toward the mortgage.

How would we go about recording this income?  I do not want us to be double counting our rental income. 

For example: Tenant pays $2000 monthly to me, I then send half of the tenants payment ($1000) + my half of the mortgage ($1500) to my fiancé (totaling $2500/month). 

1. Do we each only claim $1000 from the tenant (which is the $2000 we split evenly)? 

2. Or do I claim the full $2000/mo ($24k/yr) I receive, and then my fiancé claims $2500/mo ($30k/yr) he gets from me and I also deduct "rental expense" because I am essentially paying my fiancé $2500 in rent per month to live in the home? 

3. Or does either scenario work?

[Anonymous]

you both have a tax issue.  since he's not on the deed he is not entitled to deduct either 1/2 the interest or take a depreciation deduction.     the only option would be to take the position you are in a partnership. that would require the filing of a partnership return if this took place in 2019. for 2019, the return is now 7 months late and the penalty for that is about $3,000.   there should be no problem if the rental took place in 2020 assuming your marriage takes place before the end of 2020 and you file a joint return.  see a tax advisor because there is the concept of constructive ownership.  

[mlestrange626]

He is on the deed and I am not.  This is a rental we started in 2020 and we will not be married before the end of the year.  The tenant's rent is deposited into my account. 

I just want to clarify how to document the income for both of us.

[Carl]

He is on the deed and I am not.

Doesn't matter. You have no legal claim to the property, or to the rental income. Doesn't matter whose account it went into. But that thing of "constructive ownership" is addressed at the state level "and" at the federal level. You both have a major legal issue here that includes significantly more than just taxes. For example, if there's a legal issue between owner & tenant initiated by the tenant, that legal action will be against the legally recognized owner, and that's not you. You both need to seek legal advice immediately, if not sooner.

[Anonymous]

if he's on the deed and you are not just change the pronouns so it is you who can't take the mortgage and depreciation deductions. nor do you report any income or expenses.  he may even have to file a gift tax return  if the money he gives you is over $15,000  for 2019