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Old 08-08-2015, 03:43 PM
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How to Report Rental Income on Co-Owned Condo With Son and Roommates

We bought our twins a condo to live in while in college. One twin is listed on the mortgage with my husband and I as "joint tenants," although we pay all expenses. The twins also have two roommates who pay rent.

Question: When filing Schedule E, can we take all income/expense deductions or do we have to split it with our co-owner twin even though he doesn't help pay expenses?

Also, in order to take the tax deductions on our taxes, do we have to "rent" the condo at fair market value to our other twin, the one who is not on the mortgage? If so, does it have to be in check/paper form or is electronic transfer ok? And then his rent money is added to our income?

Is there anything else I'm missing?



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Old 08-09-2015, 08:59 PM
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We bought our twins a condo to live in while in college. One twin is listed on the mortgage with my husband and I as "joint tenants," although we pay all expenses. The twins also have two roommates who pay rent.=======> Only you can claim all expenses that you pay on your Sch E of 1040 and also you can report half of the rental income from the twins roommates on your Sch E too.

Question: When filing Schedule E, can we take all income/expense deductions or do we have to split it with our co-owner twin even though he doesn't help pay expenses?==============>>>>>>> You each file a sch E showing half of the rental income. On yours you'll show all of the interest payments, and if the property tax is included in those payments, all of the property tax. Your child can't deduct any interest or tax since the twin didn't pay it. You can only deduct the all that's for your half interest in the property.Each of you needs to include a Sch E on your return. In theory each of you would take the portion of the rental income that you received. Some may say that your portion can not exceed the percentage of ownership that you have but that is debatable. As a practical matter any division that does not exceed 100% of the total income will work just fine as long as that division is not part of some scheme to reduce one person's tax using deductions that would be of no benefit to the other.

Also, in order to take the tax deductions on our taxes, do we have to "rent" the condo at fair market value to our other twin, the one who is not on the mortgage?=====>Correct; if not, I mean if you give your twin free rent or charge at lower rent and you( the worth of free rent/ lower r ent) give more than the annual exclusion amount ,$14K as of 2015, then you need to file Form 709 with the Department of the Treasury .Otherwise, you must charge fair-market rent as you said, taxable income to you.

If so, does it have to be in check/paper form or is electronic transfer ok? And then his rent money is added to our income?===============>>>>>>>Yes as said above.

Is there anything else I'm missing?============>>>If you need to file form 709 with Dept of treasury then you can not deduct rental expenses on Sch E however you may deduct them on SCh A of 1040 aslongas you itemize deductions on SCh A of 1040.



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Old 08-16-2015, 09:00 PM
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Thanks for the information. This is very helpful!

A few follow ups:

There are three of us on the loan--my husband, myself, and one twin who is currently living in the condo. When we file Schedule E, do my husband and I (who file jointly) take 2/3 of the income leaving 1/3 for our son to file on his return?

Also, when Schedule E asks how many days were owner occupied, we will have to say 365 because our son is living there, correct? If so, will we still be able to get the tax write off for the expenses such as taxes, depreciation, etc?



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Old 08-16-2015, 09:36 PM
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There are three of us on the loan--my husband, myself, and one twin who is currently living in the condo. When we file Schedule E, do my husband and I (who file jointly) take 2/3 of the income leaving 1/3 for our son to file on his return?===. As said this was what I meant UNLESS you and your spouse TAKE 100% of the rental income, yes.

Also, when Schedule E asks how many days were owner occupied, we will have to say 365 because our son is living there, correct? =========>As a partner yes. In general, The tax benefits to which an owner may be entitled depends upon the number of days each year that the property is rented out; you, as the owner, need to rent out the property for 15 days or more and uses it for less than 14 day or more than 10% of the total rental days, if this is greater than 14 days.say you rented your vacation home for360 days last year. You could use the home for up to 36 days of personal use before your deductions would be limited.






If so, will we still be able to get the tax write off for the expenses such as taxes, depreciation, etc?=======> yes aslongas ONLY you paid the rent related expenses UNLESS the twin pays any of the expeneses.He does not need to include his share of expenses paid by your and your spouse.



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