I have seen other related questions that were answered in Canada that suggested that in Canada if you are not charging enough to make a profit then you are merely cost sharing and do not report the room and board you are charging your relatives as income. But I am in the USA.
I charge my mother for room and board. She pays for a very few food items directly, but we pay for all the food that is shared regularly in common. My question is whether this room and board income to me must be reported as income and if so, can I deduct the cost of her food from that income? (As well as 1/5th the prorated (she has 1 of 5 bedrooms) total house costs (gas, electric, water, internet, property tax, insurance, depreciation))
Are you charging rent with an intent to make a profit? If not, I really wouldn't bother with this and just consider it a cost sharing arraingment. Especially since you're renting to family.
Typically when renting to family, your expense deductions are limited to your actual rental income, and the excess can't be carried over to the next year. So on paper, everything just "cancels out". This is particularly true if you are renting to family for less than the fair market rental value.
Thank you so much for the reply. I'm not sure the deductions are enough to completely cover the room and board cost if I am not able to include the cost of food as a deduction. If I can then, yes, my costs are greater than the charges so its a wash. But if not then I'm guessing that I technically need to report the room and board charges as income and just offset it as best I can with the prorated rent-related expenses. Is that right?