Girlfriend lives in my house and helps with bills = income?

What is the name of your state? Minnesota

Like the title says.
Our arrangement is that she pay a certain amount each month (which is well below what a renter would pay), and in exchange for the reduced amount, she does not claim rental tax credit.

So my question is: am I evading taxes by not claiming what she gives me as income?

Q: So my question is: am I evading taxes by not claiming what she gives me as income?

A: Sounds like it to me.

mechengineer said:

What is the name of your state? Minnesota

Like the title says.
Our arrangement is that she pay a certain amount each month (which is well below what a renter would pay), and in exchange for the reduced amount, she does not claim rental tax credit.

So my question is: am I evading taxes by not claiming what she gives me as income?What is the name of your state?

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People living together and sharing expenses generally doesn't result in a taxable event. However, the way that you have set it up (with her paying a fixed amount each month) comes perilously close to making her an official tenant....with rental income to you. You may want to rethink that. It would be less questionable if she were simply paying her fair share of the regular bills.

What is a "rental tax credit" and why is she not claiming it?

LdiJ said:

People living together and sharing expenses generally doesn't result in a taxable event. However, the way that you have set it up (with her paying a fixed amount each month) comes perilously close to making her an official tenant....with rental income to you. You may want to rethink that. It would be less questionable if she were simply paying her fair share of the regular bills.

Click to expand...

Thank you.

I should mention that the house is belongs to me and I have a mortgage.
So..
Is the mortgage considered and expense even though I own the house?

If I were to have her pay half the morgage, is that income to me?

xylene said:

What is a "rental tax credit" and why is she not claiming it?

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It's a state thing. We used to have it here in AZ, but it has long since been eliminated. She can't claim the credit, unless he claims the income. And hence, the dilemma.

xylene said:

What is a "rental tax credit" and why is she not claiming it?

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I'm sorry, my wording was faulty.

Anyone who pays rent is eligble for a tax credit. This tax credit is paid in October.

fairisfair said:

It's a state thing. We used to have it here in AZ, but it has long since been eliminated. She can't claim the credit, unless he claims the income. And hence, the dilemma.

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You got it.

It's really no problem for her because if she were to pay what a renter pays, it would cost her thousands more dollars per year. The tax credit she recieves would not even come close to offsetting the extra expense of increased rent.


What got me in this situation?

When I first bought the home ,my tax preparer (certified CPA) asked how I was going to handle expenses my girlfriend owed. I stated the aforementioned plan, and the tax preparer said something in the order of "yeah that is fine". Two years later I mention the plan, and she makes a face and comments "that is not right".

I remind her of our previous discussion regarding this issue, and she claims she never would say anything to the effect that I claim she said.





I no longer utilize her services.