Joint Tax Return and Rental Property

[AndrewA87]

My wife and I own our house 50/50 and rent a room to our son.  I read recently that we should be indicating that we each have 50% ownership on our tax return.  

When I do our taxes, Turbotax just asks if we both own the property and does not ask ownership percentages.

There is only one Schedule E produced.

We file a joint return.

Is this correct?

Thanks

[xmasbaby0]

What are you hoping to accomplish by entering information on your tax return regarding the room rental to your son?   In many instances this would simply be a family cost sharing situation which would not be entered on a  tax return.   Do you have a written rent/lease agreement with your son?   Is he trying to claim a state rent credit on his own tax return?  

[AndrewA87]

Yes we do have a room and board agreement.

I was reviewing last year's return and I do not see where it gives me the option to enter percentages of ownership. It just asks if my wife and I both own the property.

I am not sure if that matters since we file a joint return.

[xmasbaby0]

When it asks if you both own the property say yes.   You are filing a joint return.   Your income and tax refund or tax due are all joint amounts.  

[AndrewA87]

So there is no need to spilt out the ownership percentages?

[DoninGA · Accepted solution]

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@AndrewA87 wrote:

So there is no need to spilt out the ownership percentages?

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Since you are filing as Married Filing Jointly and both own the home - NO.

[xmasbaby0]

And...again....what are you trying to accomplish by entering rental income instead of just treating this situation as family cost sharing?   

[AndrewA87]

It is my understanding that in order for my son to get the full SSI amount that we needed to enter into a room and board agreement. And that made it taxable income and from what I read from people in similar situations that would be classified as a room rental and need to be entered on the Schedule E.

[xmasbaby0]

Thanks--- I suspected it might have something to do with SSI----that explains why you are entering the rental income.

[AndrewA87]

Well I just found out that Social Security has a PMV Presumed Maximum Value which is if a SSI recipient pays at least $314/month it will not reduce their benefits as of 09/30/2024.

So if that is true I could charge say $350/month and since that would be less than the FMV I could retire the rental and just pay income tax on "Other Income" ?

[AmeliesUncle]

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@AndrewA87 wrote:

So if that is true I could charge say $350/month and since that would be less than the FMV I could retire the rental and just pay income tax on "Other Income" ?

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If you charge less than FMV that could eliminate the ability to claim many rental deductions.