I own 50% of a home, which I would like to use to write off the taxes, as I will be paying the bills. The other person invested 50% up front and they would like to rent out a room in the house. If they do the rental contract, do I have any tax responsibilities on that income? Since I would be the primary person paying the loan, can I keep the tax credit without having the responsibility of said income?

  • Do you live in the house? Do you and the partner have equal situations, only he's renting out one of the rooms? Can you try to clarify the question? – JTP - Apologise to Monica Mar 8 '14 at 23:07
  • I will not be living in the house. They are living in the house, and they would be renting the room (managing the agreement, looking for people to rent, etc.). Since the mortgage would be my responsibility, can I take the write off for the mortgage while not including any rental payments on my taxes? – user13582 Mar 8 '14 at 23:15
  • It sounds like the partner is living there, but its your half being rented out as a rental property. – JTP - Apologise to Monica Mar 8 '14 at 23:18
  • No they are doing the renting as well. I'm just a 'silent partner' with the mortgage, gaining equity in the house, but not using it. – user13582 Mar 8 '14 at 23:19
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    "Helping a relative" is a tough one. The IRS can say that you must declare the income whether it's received or not, and then treat the money to the relative as a gift. You can't just buy and pay for a piece of a house and not have the rest of it make sense. – JTP - Apologise to Monica Mar 9 '14 at 2:07

Your question doesn't make much sense. You should probably talk to a licensed tax adviser (EA or CPA licensed in your state), with more detailed explanation of the specifics of your situation.

In general, you cannot write off something you own, unless you use it to produce income. So just owning a home doesn't entitle you to any write offs. You mentioned a tax credit, I'm not sure I can think of any relevant tax credit in this context, so I really can't tell what you're talking about.

As to the other person - if he's the one renting, his portion of the house, and he is receiving the income, then it has nothing to do with you.

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  • I'm referring to writing off the mortgage interest as well as the real estate taxes. Basically, I've got a mortgage for my half of home while they paid cash for their half of the home. – user13582 Mar 8 '14 at 23:19
  • If you're not living in the house you cannot deduct anything. If you're using it to produce income (i.e.: you're renting it out), you can deduct it as rental expense, otherwise - its non-deductible personal expense. – littleadv Mar 8 '14 at 23:24
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    If you bought half with a mortgage, why are you not collecting half the rent? – JTP - Apologise to Monica Mar 9 '14 at 1:56
  • I wonder why the downvote... – littleadv Mar 9 '14 at 19:54

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