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I recently bought a house and moved in with my girlfriend.

I am 25 year old male in a relationship for less than 3 years. I purchased the house by myself. My girlfriend is not on the loan or the title. She lives with me and she gives me around 700 a month to help with bills i.e mortgage, electric, water etc. Which is all in my name as well. She does pay the internet bill and that is in her name.

Do I have to claim this as income? Also, on her tax return does she have put down as a renter?

Not really sure how all this works. I want to make sure that the IRS isn't going to come for me for making $700 cash deposits each month and not claiming it as income on my returns.

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  • Don't take my word for it, but I think your choices are to count it as income, count it as gift (websearch gift tax), or formally combine your finances. $700/month is less than the 2004 limit for untaxed gifts, so that would seem to be the simplest solution.
    – keshlam
    Feb 20 at 0:32

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Not really sure how all this works. I want to make sure that the IRS isn't going to come for me for making $700 cash deposits each month and not claiming it as income on my returns.

They might. You might want to document the arrangement with your girlfriend. There are also other reasons you might want to do that (check with a family law attorney in your jurisdiction).

For tax reasons, for it to be gift it has to be unconditional. In your case - it's more of a reimbursement than a gift. But, if the amount is similar and regular, then it becomes more of a rent than a reimbursement.

You may also want to consider your future handling of your property and what other additional investments you have. It may be worth your while to set up the arrangement as a rental, and then deduct parts of your home expenses from your rental income. You won't pay any taxes since it is very likely that your expenses (mortgage interest, taxes, utilities, depreciation) are much more than the $700/mo you're getting. You can then accumulate these "losses" and add them to your basis when selling the house, reducing your capital gains. You cannot do this with your personal expenses, but you can for a rental.

Talk to a tax adviser, may be worth the consultation fee. And to a family attorney, may save you some pain later.

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