Author Topic: Moving Into Boyfriend's House - Fair Rent?  (Read 35494 times)

ooeei

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #50 on: December 18, 2015, 08:37:03 AM »
Those who think you should pay less are wrong.

You should pay rent based on what fair rent is for your location. Your income is irrelevant. No one gets cheaper rent on an apartment if they tell the landlord their income is too low.

That's what pulling your weight and contributing a fair share is all about.

This.  If he offers to do it, great, but for you to expect it is pretty presumptuous. 

It works both ways, he doesn't want to subsidize your life because if you break up he's lost some $.  You don't want to subsidize his life because if you break up you've lost some $.  Both of you seem to be worried about that outcome.

Civex

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #51 on: December 18, 2015, 08:38:46 AM »
I don't think you current setup is fair; in my opinion, you should:

1.) Split costs 50/50 (this is if you are planning on becoming married and will eventually own the home)

2.) Pay what you would be paying to rent a place by yourself to him as rent

3.) Rent your own place until you are married

How your post reads to me is that you are looking for a home together and that of the home costs (mortgage and utilities,) you wish to pay $600 out of an actual cost of >$3k/month. I'm going to guess he could probably rent a spare room for more than that. I have been in a similar situation twice, once as the home owner and now as the renter; as the owner I charged going rate for a room in our area and when we broke up, there weren't any hard feelings about equity or ownership. Now as the renter, I pay 50% of the costs, even though I'm not currently getting the financial benefits of the mortgage. Our incomes are very close to equal and the mortgage is not a burden to either of us- with your income disparity, I think an average of options 1 and 2 would be pretty fair.

I think you've probably gotten enough unasked for relationship advice, but I will mention I'm hoping to marry the lady in the second scenario.

elaine amj

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #52 on: December 18, 2015, 08:49:51 AM »
From what I've read from different posts, there are MANY ways to handle finances and moving in together that work for couples. The biggest thing is that you both feel it is fair.

Perhaps put together a bunch of different scenarios and then discuss together the pros and cons of each? Sounds like both of you are coming at this from completely different angles and viewpoints (He wants 50-50 and you want % of income) and you need to find a scenario that feels right to the both of you.

I've never been in your situation and am very traditional when it comes to marriage and finances. And to be honest, the % of income thing has always sounded weird to me. If you're keeping separate finances, then why aren't you approaching the living situation as if he was a roommate? I like what someone else suggested - this is how much you want to afford for rent. If bf want a nicer place (like a house), bf needs to make up the difference. Otherwise, you can stay in your current living situation or you can search for a place you can both afford. It does seem unfair that you would have to pay more than you want because your bf wants a nicer place.

All that said - I agree that it is rather presumptuous to "expect" your bf to subsidize your living. If he offers/wants to - great. But it shouldn't be expected. When I dated my husband, I moved into a rental house he owned. He went to a lot of effort to redo the space so that I could afford to pay him a fair market rent. (he had to add an extra bedroom so I could get more roommates and split the rent 3 ways. I think the poor guy ended up spending more than he would have if he had just subsidized my rent - especially considering we got married a year later LOL!)
« Last Edit: December 18, 2015, 08:52:33 AM by elaine amj »

Kris

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #53 on: December 18, 2015, 08:51:14 AM »
Keep your apartment, and let him buy his house. This way, he pays all his own expenses, and you pay yours. No matter who is right, your relationship is not ready for cohabitation.

Tell him you're not going to move in with him, and wish him sincere good luck on finding a house he loves. Do not guilt him, and if he tries to convince or guilt you, tell him politely but firmly that you are not comfortable with where the conversation has led the two of you, and that at this time you feel it's better for him to move forward with his plans and you will cheer him on from the sidelines.

Perhaps this process will help shift things one way or another in the relationship.  Either you both will move toward a space of thinking in terms of "our" money, "our" future, and "our" decisions -- or you won't.  But moving in together like this is a bad idea. 
« Last Edit: December 18, 2015, 08:53:22 AM by Kris »

CommonCents

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #54 on: December 18, 2015, 09:17:48 AM »
I see two relationship dealbreakers in this situation.

1) Your insistence that rent distribution must be proportional to income is IMHO unreasonable and if he was posting here I'd probably advise him to run the other direction.   If it was his idea as the higher earner that would be considered a noble offer, but in your situation it's a self-serving demand.  I don't blame him for being upset if he feels like he's being taken advantage of.

2) His desire to buy a house you cannot afford when splitting 50/50 is similarly unreasonable and I don't blame you for hesitating.  If you truly want to live together, you should be focusing on finding a place you can both afford.  If you can afford $900 a month, then go back to the original idea of finding an $1800/month apartment and you'll be fine.  But if a nicer place is more important than an equitable relationship, then your relationship is already on really shaky ground. 

Money disagreements are a red flag and a major source of divorce.  Don't sign up for something that you both aren't ready for.  Why not simply keep your current living situation?

+1!!

I don't think you current setup is fair; in my opinion, you should:

1.) Split costs 50/50 (this is if you are planning on becoming married and will eventually own the home)

2.) Pay what you would be paying to rent a place by yourself to him as rent

3.) Rent your own place until you are married

How your post reads to me is that you are looking for a home together and that of the home costs (mortgage and utilities,) you wish to pay $600 out of an actual cost of >$3k/month. I'm going to guess he could probably rent a spare room for more than that. I have been in a similar situation twice, once as the home owner and now as the renter; as the owner I charged going rate for a room in our area and when we broke up, there weren't any hard feelings about equity or ownership. Now as the renter, I pay 50% of the costs, even though I'm not currently getting the financial benefits of the mortgage. Our incomes are very close to equal and the mortgage is not a burden to either of us- with your income disparity, I think an average of options 1 and 2 would be pretty fair.

I think you've probably gotten enough unasked for relationship advice, but I will mention I'm hoping to marry the lady in the second scenario.

+1

But honestly, I'm not saving that much money off my current expenses, and I was really hoping that moving in together would allow me to really increase my savings rate.  I guess he thinks the same thing though, but I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.

[snip]

The whole debate has actually really soured my attitude toward him, as I feel like he's only looking out for his best interest and not for mine at all.  But maybe he thinks the same thing about me.


Seems like you are both thinking of yourselves first rather than each other or your shared future, which is why I think you shouldn't move in.  You both want the other to want to do more for you, and that doesn't seem to be happening. 

My thought is that we should have equal opportunity to save percentages of money and I can't figure out if what he will be able to invest is going to be equal percentage to what I could invest, if I pay $900.

Why?  I mean this as a genuine question.  Why do you feel that you are entitled to equal opportunities to save the same percentage of money?  You're not married (or thinking of it from what I can tell).  You're also not earning the same amount - you choose a lower earning career, or you work fewer hours/not as hard, or you've been working shorter, etc.  There could be many reasons why he's paid more.  Why does being in a relationship entitle you to save equal percentages of money?  To me, as Tyler wrote, it's generous for the wealthier partner to offer to pay the percentages, but it's unreasonable for you to expect or demand this.  You only have the "right" (I use this term loosely):
1) to choose to live together or apart and
2) to live in a place you can afford. 
How this might work out is you agree you want to live together but that you only want to spend $X on a place.  If he wants a place that is $X+Y, he either can live separately or he can subsidize - but that's his choice.

btw, you do know he'll have a lot more expenses beyond the mortgage that will be all his, right?  He'll have house insurance, repairs/upkeep, and utilities to pay.  (He may also choose to buy furniture or do upgrades, which would benefit you.)  He won't be saving as much as you think.

I'd slam him more for going back on his "anything you pay is great" but frankly, to me it seems like he expected you'd offer about what you'd pay in renting costs and was unpleasantly surprised to discover you wanted to pay quite a bit less than that.  I'd be unhappy too with your offer because it's pretty unreasonable to me.  It just seems like you pulled out a number out of a hat to get $600 based on what you wanted save, not what you'd pay elsewhere if you rented OR what renting the house with him might be valued at, either of which might be a fair and reasonable approaches.  (And even with a longer commute, imho, $600 - in LA - is pretty low to offer to pay for rent.)

If I were you and you still wanted to move in despite all of this advise not to because your relationship is not ready for it and it sounds like one or both of you will resent the other, I might start out by saying:
1) I've been thinking a lot about our house conversations, and I think I've not quite considered your perspective.  I've been working on that, and I hope you'll also consider mine. 
2) I think my allergies will get worse living with your pets.  I'll have to deal with the symptoms myself, but can we agree to split these costs if I move in?
3) If I were to rent elsewhere, I'd pay $900.
4) I think that the value of renting half your home is X ($1500?), however, it's not what I would choose to do absent you buying it, so I think rent elsewhere is a better estimate.
5) I expect that my commuting costs will increase by Y ($100?).
6) What do you think about if I pay $900-(Y/2), and split utilities?

honeybbq

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #55 on: December 18, 2015, 09:20:55 AM »
Tell him you want to find a place where you can both share expenses and then go out and find an apartment for $1,200 since you only want to pay $600 in rent. Show him the place and if he refuses to move in with you, well you have your answer.

I agree with this. I think 50/50 is fair. But ONLY if you have a say in the place. That isn't happening.

little_brown_dog

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #56 on: December 18, 2015, 09:22:41 AM »
I find splitting finances in a very structured/rigid way to be a bit strange for couples who are in long term relationships. To me, a partner who makes that much money should be genuinely okay shouldering the burden of most of the living costs if he or she plans on having their partner in their life for a long time. Similarly, the partner with the less lucrative field would also not be so squeamish about having a lower personal savings rate because they view the income as a joint venture. Whenever people get really freaked out about supporting their partner financially, I have to question the long-term prospects of the relationship. The only reason to be so adamant about “my money/their money” is because you are actively protecting your assets against a breakup or something going wrong. To me, this type of argument indicates a serious lack of trust/faith in eachother and the relationship. Then again, I'm more old school and view living with someone as the step before marriage, where alot of people nowadays often live with multiple romantic partners throughout their lifetimes with no intention of getting married or staying with that person forever.
« Last Edit: December 18, 2015, 09:29:13 AM by little_brown_dog »

AZDude

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #57 on: December 18, 2015, 09:26:28 AM »
Completely honest here. He sounds like a dick. Keep separate residences for now, or at least have a back-up plan for when things go south. Whatever you do, do not agree to pay 1/2 of his mortgage. When my wife and I agreed to move in together, we had the opposite argument. She wanted to look at super-cheap apartments because she was making 1/2 what I was. I thought they all sucked and wanted to pay a higher percentage so we could live somewhere "decent".

Things worked out just fine in the end, and I eventually relented and we split everything 50/50, even though this meant she had to work extra hours.

Sylly

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #58 on: December 18, 2015, 09:44:43 AM »
Sorry, but I have to agree with the later posters who think you're being unreasonable. I don't think your guy is being a jerk at all. You're both doing the same thing -- watching out for number one, and there's nothing wrong with that. But you can't call him a jerk without calling yourself one too.

Regarding the apt: I would do 50/50. Shouldn't matter who earns more -- each gets the same benefit to the the apartment.

The house is slightly more complicated, but I would find what fair rent in that area would be, and pay that. $600 isn't going to get you anything but a shared room in some of the LA neighborhoods I'm aware of (granted, they're on the West side and tend to be expensive, but I can't image North Hollywood is that much cheaper). I can understand your bf feeling like you're taking advantage of him when you lowball him like that.

DH and I moved in together before marrying. There was no question -- both of us just assumed we'd pay 50/50, and we did. Even now we have mostly separate finances. I send him money for mortgage, pays some types of expenses. He pays other expenses. We never count to make sure we're even, but every now and then check that neither is spending way over the other. BUT, we don't really care that much as we both know it's all OUR money. We both often joke "It's all my money anyway" and realize how lucky we are that we can do that (some people are way too uptight about money and would get offended by such a comment).

Given these disagreements, have you two discussed marriage at all? If yes, I think a discussion of what each of you would expect to do with finances after marriage would be a good idea.

druth

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #59 on: December 18, 2015, 09:47:19 AM »
I think a big issue is that your boyfriend wants a house that is so far outside of what you were paying before and with seemingly no input from you about things like location.  I bought a house and my boyfriend pays rent, but it's hardly higher than what he paid before (500 with utils ->675 with no utils).  We shopped for it together, we both agreed on the house and the price range. 

If you don't get to have full equal input on the house and the price range then I do think its unfair to expect you to pay anywhere near half or significantly over what you are paying now, simply because it would be such a disproportionate burden.  That said, if your boyfriend can't see it that way you shouldn't be living together.

I would just tell him your budget, and if he buys a house worth way more than that, then he can pay the difference, if he picks an apartment that is way more then he can pay the difference.  The important part is you should be fully willing to get a place where that amount is an equal share.  This is what we did when I was looking at houses - boyfriend was willing to pay X, and which was equal to half of a reasonably priced house.  Above that it was my own burden.

Also it doesn't sound very rational to me to jump to a place that is going to be that much more expensive than the apartment when it sounds like your life situations aren't all that stable.
« Last Edit: December 18, 2015, 09:50:17 AM by druth »

galliver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #60 on: December 18, 2015, 09:47:44 AM »


Whenever people get really freaked out about supporting their partner financially, I have to question the long-term prospects of the relationship. The only reason to be so adamant about “my money/their money” is because you are actively protecting your assets against a breakup or something going wrong. To me, this type of argument indicates a serious lack of trust/faith in eachother and the relationship.

That's a bit of a false dichotomy. You can believe in the relationship (emotionally) but still know, logically/cognitively, that people do break up even after 4 years, 6 years, etc so it's smart to guard against that outcome somewhat by maintaining some separation of finances. You can believe you won't be in a car crash but still wear a seatbelt and buy insurance.

Btw, I think it's easier to split things 50/50 (or any distribution) than approximate it by alternating. We have a shared checking account that we contribute equal amounts to and use for rent, bills, and a CC of mine he is an authorized user on that we use for joint expenses. I find that alternating took at least some tracking of what was happening. Our sustem feels like a stepping stone to joint finances, while keeping each of us somewhat insulated. But I'm not bashing other choices or preferences. Just sharing. :)

Cassie

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #61 on: December 18, 2015, 09:53:48 AM »
Suze Orman says you split the bills by percentages. Each person pays the same percentage of their income towards rent, etc. This way the smaller earner is not drowning while the big earner has tons of $. I agree with Kris and would keep my own place at this time. When I met my current hubby we were both middle aged and he was living with his Mom due to an expensive divorce and job loss.  I owned my condo based on what I could afford . I invited him to move in and paid for everything.  2 years later he was in a spot where he could buy the groceries, etc. As he ended up earning about double what I did he contributed more and more until he was paying more because he made so much more $. If you are generous and in a relationship because of love it doesn't matter. We ended up getting married and sharing all our $. If I had not been generous in the beginning none of this would have happened. I was more interested in him then his $.

use2betrix

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #62 on: December 18, 2015, 10:47:24 AM »
What is your current living situation? What do you have and how much do you pay?

To the members saying she "shouldn't pay more than $600 if that's what she feels comfortable with." She lives in LA. You won't find a place with utilities for $600. Honestly, you probably can't even find your own place with utilities for $1000. So getting to live in a HOUSE with a yard and all that, for $900 all in, is a pretty solid deal.

ponyespresso

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #63 on: December 18, 2015, 10:50:33 AM »
I think it's good these issues are coming up now, before you are engaged or married. Also work out your feelings on having kids as well. I believe those are the two biggest deal breakers, relationship-wise.

Also, trust your instincts. If you have doubts about this guy think about cutting your losses now. Or at the very least, keep your own place, near your work for a while. (Plus, long commutes really suck.)

 I don't like that he said, "he'd be happy with whatever I contributed" and then was not. Hmmm. That's not giving me warm fuzzies. It kind of sounds like either way one of you would be resentful of the other (if he buys the house & you move in.)

It's one thing if you are married and helping pay down the mortgage, because at that point you own half the house. CA is a community property state, so if you do get married you own half the property, although I'm not sure how prenups work in these situations, if they are valid. And if he wants a prenup regarding house ownership I'd really run at that point.

Good luck! This sounds like a stressful situation.

bridget

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #64 on: December 18, 2015, 11:16:21 AM »
Quote
I could go on, but like I said, the problem isn't of what is fair, it's of your relationship. In my opinion, truly happy couples aren't "keeping tabs" or even really care who pays what, they just look at the big picture and the long term.

Yeah that's kinda what I figured -- it's not an objectively unfair rent for Los Angeles, but I don't want to be his roommate, I want to be his life partner, and with someone who isn't trying to get close-to-fair market rent out of me.

This is what it comes down to for me - you are in different places in how you view the relationship.

I think the people who are saying that percentage-based is always right, or 50/50 is always right, are wrong. Both are equally valid ways of splitting expenses between romantic partners. But each fundamentally reflects different views about the relationship and it's longevity.

With my husband, whom I'm committed to, finances are strictly based on what each of us can comfortably contribute. He made 100% of the money for about 5 years while I finished undergrad and went to law school. Then we both worked for a couple of years. Now he's back in school, and I'm paying 100% of the expenses [as a note, we are living long distance from each other for this year, because my job took me to LA and he needs to finish school in our hometown. That means this year my salary is paying for an apartment in LA as well as our mortgage back in Utah. This is very expensive, but not a big deal, relationship-wise]. Once he's out of school, he will move to LA and have a job, but I'll probably make about 2-3x his salary. We think of our money as one pot, and decide what we can afford based on the overall picture. Mathematically, this means that if we were thinking of our salaries as separate, we would each be paying expenses proportionally, and one of us would be subsidizing the other. There is no alternative opportunity of a random roommate who would pay market rate. We are fine (happy!) with that.

If tomorrow I was not married and instead dating somebody who I liked and was up for moving in with, but I wasn't sure it was the end-all be-all relationship (and, importantly, would also be ok living with a different roommate), then I would absolutely want to split it 50/50. I would be comparing it against the (actually possible) opportunity cost of having a roommate, and I would not be invested enough to be comfortable with subsidizing his life.

So, it sounds like you are indeed at the stage of thinking of yourselves as life partners, and he is still thinking of you as a girlfriend who could double as his roommate, at least for now. THAT, I think, is your relationship problem. Not whose math is objectively correct.

I'm a red panda

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #65 on: December 18, 2015, 11:30:32 AM »
I would not pay anymore than what you would pay towards rent at a place you like to live.

But a few things to consider:

1) I wouldn't present the "unfairness" of him gaining payment towards his mortgage principal; because your current landlord gets that too.

2) Don't cut off your nose to spite your face: if you are going to end up spending every night at that house anyway, it probably isn't worth it to live, and pay utilities elsewhere- if you won't be living there.

I really can't help other than that. I never lived with a romantic partner before I was married; and once I was all money was "our" money, so the whole percentage vs 50/50 thing isn't something I can do.  But very often fair does NOT mean equal, so I lean towards a 50/50 split when HE is picking, and owning the house, would not be the fair thing to do.  50/50 is the way I would go if you were looking for a place together, mutually agreed on it, and renting. The percentage thing doesn't usually make sense to me.

And if you do move in, make sure you insist on a lease to offer you protection for your housing if something happens. I mean, if you break up, you probably don't WANT to still live with him, but if you have a lease he can't just kick you out with no notice.
« Last Edit: December 18, 2015, 11:36:24 AM by iowajes »

RunHappy

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #66 on: December 18, 2015, 11:52:02 AM »
You said it was "his future house" you never said it was "our future house".  You can plan on being his life partner but it doesn't sound like he is planning to be yours.

My other question is why is he talking about buying a house right now?  He knows it will put a financial strain on you, it will make your commute longer and more expensive, so I question why now?  Why not wait a year or two?  Why can't you both live together in a place where the commutes won't kill you?


mm1970

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #67 on: December 18, 2015, 11:56:44 AM »
My first thought:  Run far away.

Ok, maybe that is unfair.  But you shouldn't be paying more than you would be spending on housing anyway.  How much are utilities?  300 for utilities (900-600) seems like A LOT.  Maybe things are that much more expensive in LA, and that is coloring my view.

I guess ultimately, unless you are thrilled to move in together for the 900, I wouldn't.  If you have any reservations, now is the time to listen to them.  The extra commute alone is probably worth at least a hundred or so bucks a month.
This is kind of my thought too.

First of all, I really wouldn't take the relationship into account right off the bat.  In the apartment scenario, I think you should pay half.  You aren't married.  So, if you were to pay half, would you want to?  When I had roommates, I had a roommate who wanted a nicer place than me. We eventually parted ways because I was able to get a place by myself for less, that was convenient to my work, not hers.  No, we weren't in a relationship, but that muddies the waters.

For the house situation, look at it this way: how much is the house?  How many bedrooms?  And, most importantly - what is the going rate for a bedroom rental?  It is common here in Santa Barbara for many young professionals to rent a 3 or 4 BR house, and the "rate" for an individual room is in the range of $1000.  What is the rate in that area of LA?

So if it's a 3BR house, and the rental rate is $1000 per bedroom, then I'd say you pay $1000, but only if you are getting your own room.  If the two of you are effectively sharing a bedroom, leaving the other two "open" for more renters, then I'd split it.

Essentially, you need a place to live, and he's looking out for help with mortgage  But it needs to be at least somewhat "win-win".  You don't want to end up paying more and commuting more.  He probably wants mortgage help - but you know, he can always rent out other bedrooms.  I'm assuming you are a better roommate though - so he needs to factor that in.  It's not quite the same as renting out the spare bedroom to a random dude.

With random dudes, you can have a mortgage of $3k and rent out the bedrooms for more than that if it's market rent.

AlwaysBeenASaver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #68 on: December 18, 2015, 12:00:44 PM »
If you can't come to an agreement TOGETHER about this issue, an agreement that you both feel is completely fair, don't move in together!!! Let him buy his house, and you stay in your apartment near your work. Once you move in together, especially in a house he OWNS, there are going to be hundreds of other issues to negotiate, and if you can't even get past this one, you don't want to get into the others.

little_brown_dog

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #69 on: December 18, 2015, 12:05:33 PM »
That's a bit of a false dichotomy. You can believe in the relationship (emotionally) but still know, logically/cognitively, that people do break up even after 4 years, 6 years, etc so it's smart to guard against that outcome somewhat by maintaining some separation of finances. You can believe you won't be in a car crash but still wear a seatbelt and buy insurance.
[/quote]

Some separation is smart. But this seems like almost complete separation, more like a roommate agreement than a couple figuring out their mutual finances together. Plenty of married couples have their own individual retirement accounts, savings, etc, but this couple seems to be particularly aggressive in safeguarding their individual assets from each other to the point where it is a major point of contention. The op doesn’t want to support him by paying more for living expenses, and he doesn’t want to support the op by covering more costs. The issue isn’t about separate financial structures, it’s more like they are playing a game of chess and looking to best the other for their individual financial gain.
« Last Edit: December 18, 2015, 12:08:19 PM by little_brown_dog »

mulescent

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #70 on: December 18, 2015, 12:06:21 PM »
I just wanted to add a few things:

I strongly disagree with many of the prescriptive and categorical responses you're getting (e.g. "if you aren't ready to combine finances, you shouldn't move in" or "you must pay half or it's not fair.").  You and he need to work something out that feels right to each of you.  That doesn't mean pleasing him at your own expense.  It means thinking through what each of you really want and either arriving at a compromise or calling it off. 

My partner and I split household expenses according to income and that works well for us.  If you are going to split expenses, I feel that the share of the mortgage that goes to the principal (e.g. not interest, taxes, etc) should be excluded from the calculation.  Your BF should pay that because it's savings for him.  You should also discuss how you'll handle maintenance.  In my relationship I am the house owner and I take care of all house-related expenses.

I would also strongly encourage you both to think about the legal implications of cohabitation in a house owned by one partner.  In my state, the non-owner partner gains a significant legal interest in the house over the years if any sort of payment is made and especially if they do work on/around the house.  We didn't appreciate this when we started out.  It's not as simple as a renter/landlord relationship.

dandarc

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #71 on: December 18, 2015, 12:06:52 PM »
Essentially, you need a place to live, and he's looking out for help with mortgage  But it needs to be at least somewhat "win-win".  You don't want to end up paying more and commuting more.  He probably wants mortgage help - but you know, he can always rent out other bedrooms.  I'm assuming you are a better roommate though - so he needs to factor that in.  It's not quite the same as renting out the spare bedroom to a random dude.
This.  Win-Win is a must.  If he's buying the house regardless, then he's winning on any amount of rent.  Important that the OP get some gain here too.

When my now-wife moved in, we discussed and came up with a number that saved her quite a bit compared to the place she had been renting, and presumably would have stayed at.  I was financially ahead with anything, and this figure was less than half of Mortgage + Condo fee + Utilities + Cable/Internet.  Doesn't matter now - married so everything is ours anyway, but seemed fair at the time.

Also was good to be able to respond when now Mother-In-Law said "He just wants you to buy him a house."  Wife could just say "saving money compared to the other place anyway".

humbleMouse

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #72 on: December 18, 2015, 12:12:18 PM »
I don't have an opinion on the house thing, but I think you should pay half the rent of the apartment. 

dcozad999

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #73 on: December 18, 2015, 12:21:02 PM »
The fact that you are fighting this much about money before you get married isn't a good sign.

Neither one of you are right or wrong. You can tell that by the many differing opinions on this forum. The only thing that matters is what you and your SO think is fair, and it appears you don't agree in that area. So throw out everyone else's opinion and determine what you are comfortable with, because it doesn't sound like you are comfortable with the terms he is offering. If I were you I would keep separate residences because if you give in and pay more than you are comfortable you WILL resent him eventually. And if you convince him to let you pay less he WILL resent you. In fact it sounds like you already resent each other and you haven't even moved in yet.


domo

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #74 on: December 18, 2015, 12:46:07 PM »
I had the exact same situation happen to me. He was looking for a house weather or not I was going to live with him. I made a little less than half of what he made at the time. We decided on 1/3 of the mortgage plus half of the utilities. Over time, this migrated to me paying none of the mortgage and all of the utilities, as he travels for work a lot and kept missing payments. So I set up online payments for the utilities and took over that responsibility. It works out to be about the same amount of money, but varies. I felt that this was more equitable, as I am home more often and he is gaining equity on the house. Also, I could drastically reduce the utility bills when he was out of town. All house repairs fell under his budget as well. Now that we are getting married we are working on joining our finances. Our incomes are no longer so different. We are contributing to two joint accounts right now; one high-interest checking account for the household, and one high-interest savings account for the wedding. We contribute 50/50 to the wedding account. We contribute 60/40 to the household checking account, which pays for all joint expenses down to the bar tab when we go out. When we get married, we will keep the wedding account as a travel and vacation account. We have separate personal checking, savings accounts, and credit cards. It eliminates any money fighting, as any contested item quickly becomes a "personal" expense or is not bought at all. After all, if you wouldn't pay full price for something then you don't really need it, do you?

bacchi

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #75 on: December 18, 2015, 12:51:04 PM »
The house is his house. If you break up, he keeps the house and any equity. Paying half is crazy. Of course, it could also get messy if splitsville and you claim to be common-law partners and want your half of the community property (even though you're not on the deed).

There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)

Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.

The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.

https://www.reddit.com/r/personalfinance/comments/2lhl02/do_i_need_to_claim_my_girlfriends_portion_of_rent/

Naturally, there are millions of couples who do this and the income isn't reported.

AlwaysBeenASaver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #76 on: December 18, 2015, 01:32:05 PM »
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)

Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.

The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.

Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.

ReadySetMillionaire

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #77 on: December 18, 2015, 01:48:37 PM »
As someone who just bought a house with my GF (not married or engaged yet), I was going through this thread and quoting every post I agreed with. Turns out Common Cents did it for me. Go back and read his post. It's the best post in this thread.

Aside from everything he wrote, the biggest red flag I see BY A BILLION MILES is your lack of togetherness. Your original post is about MY money and percentage of MY income and and him saying I want THIS house because I can afford it. Dating for four years, it's hard for me to imagine such individuality on such big issues that should be decided together.

When you are in a long term relationship, you and your SO are a TEAM. Everything you do should be done with a common goal in mind. Children. Religion. Finances. Everything.

My relationship isn't perfect--far from it--but my GF and I are a TEAM. I make $47,500 and my GF makes $67,500. We split everything 50/50. EVERYTHING.

When my GF and I bought furniture when I moved into her apartment, we split everything 50/50 (didn't matter if it was a dresser solely for her...it was our TEAM purchase). When we were saving for a house, each of us sent $400/month to an Ally account (even though that was a higher percentage of my income). When we purchased furniture for our new house, we split it entirely even though it was the one she picked out and loved and I was "meh" about it.

And this upcoming year, our goal is to put $30,000 in retirement accounts. Even though I make less, I am going to be contributing $20,000 and she is going to be contributing $10,000 (she is paying a big car payment and finishing off paying her student loans). But I don't look at it as me saving $20k and her saving $10k--as a team we are saving $30,000 in a single year, and I'm ecstatic about that. 

So I'm not criticizing you in particular. I'm just saying that both of you need to take a step back and determine whether you want to be with each other for the long haul. Do you want to have children together? Do you want him to be the father of your children? Do you want him to be the one you lean on when you're down?

Because if the answers to those questions are yes, then stop worrying about the nickels and dimes. It will go from "I make $60k and he makes $130k" to "WE make $190k." And then you'll see that this Suzi Ormann stuff you're EXPECTING is small peanuts.

EDIT: just wanted to add that the post below sums up my entire post but in a much more concise way: 

So, it sounds like you are indeed at the stage of thinking of yourselves as life partners, and he is still thinking of you as a girlfriend who could double as his roommate, at least for now. THAT, I think, is your relationship problem. Not whose math is objectively correct.
« Last Edit: December 18, 2015, 02:07:10 PM by ReadySetMillionaire »

domo

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #78 on: December 18, 2015, 01:56:45 PM »
The house is his house. If you break up, he keeps the house and any equity. Paying half is crazy. Of course, it could also get messy if splitsville and you claim to be common-law partners and want your half of the community property (even though you're not on the deed).

There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)

Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.

The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.

https://www.reddit.com/r/personalfinance/comments/2lhl02/do_i_need_to_claim_my_girlfriends_portion_of_rent/

Naturally, there are millions of couples who do this and the income isn't reported.

This is a really good point, and another reason to split along utilities/house lines. Even if you live in a common-law state, it's best not to do anything that could get the IRS involved. If you break up/divorce, you would have a claim against that equity. It's hard to prove, but people sue for less especially if it's a bad split. Tell him you are watching out for his legal interests.

A lot of people are arguing this as from a marriage mentality, but you aren't even engaged. You're still dating. Rushing into things is not going to make your relationship better. Trust is not something you can force. It's perfectly ok to move in with someone and not know they're the one. You're still figuring it out, and that's ok. Only fools rush in.

bacchi

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #79 on: December 18, 2015, 02:09:36 PM »
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.

What the IRS phone reps tell you and what the IRS court decides are two different things. Any money given to you is either income or a gift. It'd be hard to explain away a regular, monthly, gift that neatly matches 1/2 the mortgage (or whatever), especially when the gifter received services (somewhere to live).

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2
https://www.irs.gov/taxtopics/tc415.html

In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.

irishbear99

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #80 on: December 18, 2015, 02:23:14 PM »
Putting the whole question of "How much rent is fair" aside, what I see here is two people who have been dating for four (!) years and still don't trust each other. That's what it boils down to, right? You each don't trust that the other won't take advantage of your kindness or generosity. Having these types of issues four years into the relationship is concerning, and I wouldn't consider living together until you can work that out.

pk_aeryn

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #81 on: December 18, 2015, 02:27:24 PM »
Quote
I'd slam him more for going back on his "anything you pay is great" but frankly, to me it seems like he expected you'd offer about what you'd pay in renting costs and was unpleasantly surprised to discover you wanted to pay quite a bit less than that.  I'd be unhappy too with your offer because it's pretty unreasonable to me.  It just seems like you pulled out a number out of a hat to get $600 based on what you wanted save, not what you'd pay elsewhere if you rented OR what renting the house with him might be valued at, either of which might be a fair and reasonable approaches.

The conversation went verbatim like this:

"I just want you to live with me, and anything you can contribute is fine.  Even if that's as little as $500."

"Ok, I'm glad to hear that, because I've been considering the numbers and I think that $600 is fair because that's what we had previously agreed I would pay if we moved into an apartment.  I don't care whether we live in a house or an apartment."

So he actually brought up and even lower number than me first!  Then 3 weeks later, he confessed he changed his mind about his "anything I can contribute."  I appreciate that he is free to change his mind, and I told him that-- Of course I felt like he was setting me up and giving me some kind of litmus test and I failed it.

That being said, I can see and respect everyone's thoughts that it is probably too low given our relationship at this point. 

Quote
In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.

I do not see a court thinking I would be entitled to any legal claim to the house, regardless of whether he pays taxes on money I give him.

The gift tax, however, is something I had not thought about, and probably a good reason to keep my contributions to under $1K/mo?

And thanks to everyone who has wrote their opinions/experiences.  All of your advice is much appreciated. Given me a lot to think about.


AlwaysBeenASaver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #82 on: December 18, 2015, 02:27:31 PM »
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.

What the IRS phone reps tell you and what the IRS court decides are two different things. Any money given to you is either income or a gift. It'd be hard to explain away a regular, monthly, gift that neatly matches 1/2 the mortgage (or whatever), especially when the gifter received services (somewhere to live).

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2
https://www.irs.gov/taxtopics/tc415.html

In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.
Yeah. I wasn't *too* worried about it, figured I had a pretty good claim that I tried my best to report as appropriate by calling and asking what to do. And a reasonable claim it was a gift towards general household expenses (food, utilities, whatever) - wasn't anywhere near half the mortgage and I certainly wasn't going to kick him out if he didn't pay. And if they still forced me to consider it rent, they would still need to answer my original question about how to report it and let me take the depreciation on the house. Moot now, it was a LONG time ago.

TravelJunkyQC

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #83 on: December 18, 2015, 02:30:36 PM »
Honestly, I am in a similar situation. Although the salary difference isn't as big. I live in my BF's condo with him; how we work, is that we added up all living expenses EXCEPT mortgage principal and taxes (so mortgage interest, condo fees, heat, electricity, water, internet). We then split those pro-rata according to our salary. I drop my share into our shared bank account (he contributes nothing since he ends up covering the aforementionned fees from his accounts), and this is the money we use to pay food and shared fun. However, we have had many discussions considering the fact that after his PhD his salary will go up a lot, and mine won't, which means that our pro-rata rate of 60% to 40% technically SHOULD shift, but he doesn't feel comfortable eventually covering 70%+ of our shared expenses. I'm okay with this only because I have a substantial monetary gift coming my way in 2017 that I won't be sharing with him.

All this being said, I will judge neither you nor your boyfriend. It may come out as corny, but do what feels right. If it pisses you off every month to pay 900$, don't do it and stay put. If you would rather live with him, instead of keeping the extra 300$, then move in and move on with the topic. Money is a weird subject with couples. Most people think my BF and I have a weird arrangement too, but frankly, no one is at home with you two other than the two of you. So who cares? Protect yourself, protect whatever and whomever you love, and for the rest, f*** it.

fitfrugalfab

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #84 on: December 18, 2015, 02:32:54 PM »
I think a big issue is that your boyfriend wants a house that is so far outside of what you were paying before and with seemingly no input from you about things like location.  I bought a house and my boyfriend pays rent, but it's hardly higher than what he paid before (500 with utils ->675 with no utils).  We shopped for it together, we both agreed on the house and the price range. 

If you don't get to have full equal input on the house and the price range then I do think its unfair to expect you to pay anywhere near half or significantly over what you are paying now, simply because it would be such a disproportionate burden.  That said, if your boyfriend can't see it that way you shouldn't be living together.

I would just tell him your budget, and if he buys a house worth way more than that, then he can pay the difference, if he picks an apartment that is way more then he can pay the difference.  The important part is you should be fully willing to get a place where that amount is an equal share.  This is what we did when I was looking at houses - boyfriend was willing to pay X, and which was equal to half of a reasonably priced house.  Above that it was my own burden.

Also it doesn't sound very rational to me to jump to a place that is going to be that much more expensive than the apartment when it sounds like your life situations aren't all that stable.

+1. This is great advice. The only reason he wants to get a house now and have a larger housing expense is because HE got a raise. He needs to consider that your budget has stayed the same.

electriceagle

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #85 on: December 18, 2015, 02:40:58 PM »
It sounds like the two of you are girlfriend and boyfriend, rather than life partners (so far). Perhaps its not yet time for you to move in together.

People don't like to talk about it, but money is important in relationships. Have you ever sat down to discuss whether you should have separate finances or if he should provide some subsidy because of your income is lower? It sounds like you're accidentally having that discussion in the context of rent rather than making a conscious choice to make that decision.

You should have that discussion on purpose rather than by accident. If you can't agree and separate vs shared finances are a deal-breaker, you may need to part ways. You might also decide that you're not yet ready for shared finances, in which case it might not make sense to move in together.

LeRainDrop

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #86 on: December 18, 2015, 03:19:01 PM »
I disagree that the only way to fairly split costs is 50/50. There is more to fair than 50/50, would anyone say we should split all our food 50/50 because that would be fair - dispite the fact that SO loves bananas and I hate them, or that SO is a foot taller than me and needs to eat more. Where does it end? Do I need to split my birth control pills 50/50 with him too?
I agree with you that there are other fair ways than 50/50 (and depending on the situation, they might be more fair). But birth control pills seem to be a weird example. Unless you were taking them without his knowledge, yes, he should be paying 50%. He is getting exactly the same use out of them as you: Not having a child at an inopportune time.

I suppose you could split the cost of birth control pills in any manner and still have it be fair -- they are FREE.

music lover

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #87 on: December 18, 2015, 06:00:23 PM »
This.  Win-Win is a must.  If he's buying the house regardless, then he's winning on any amount of rent.  Important that the OP get some gain here too.

When my now-wife moved in, we discussed and came up with a number that saved her quite a bit compared to the place she had been renting, and presumably would have stayed at.  I was financially ahead with anything, and this figure was less than half of Mortgage + Condo fee + Utilities + Cable/Internet.  Doesn't matter now - married so everything is ours anyway, but seemed fair at the time.

Also was good to be able to respond when now Mother-In-Law said "He just wants you to buy him a house."  Wife could just say "saving money compared to the other place anyway".

He's not "winning" and she's not "buying him a house"....she's paying rent, which she would have to pay no matter where she lives, with or without him. If it wasn't rent, then it would be a mortgage, property taxes, insurance, and maintenance.

She could always buy a house and charge him only $600 while she covers all the other costs.

use2betrix

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #88 on: December 18, 2015, 06:35:22 PM »


There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)


And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!

You know... While we're on the topic of things bitter pieces of shit do after breakups.

Amazing that idea would even cross someones mind.

galliver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #89 on: December 18, 2015, 06:48:44 PM »


There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)


And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!

You know... While we're on the topic of things bitter pieces of shit do after breakups.

Amazing that idea would even cross someones mind.

+1 :/

Cathy

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #90 on: December 18, 2015, 07:44:19 PM »
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.

Phone calls with the IRS are not legal authority. "[T]he authoritative sources of Federal tax law are in the statutes, regulations, and judicial decisions", not in oral statements made by IRS representatives during a phone call. Zimmerman v. Commissioner, 71 TC 367, 371 (1978), aff'd without opinion 614 F 2d 1294 (2nd Cir 1979). According to regulations promulgated by the Commissioner of Internal Revenue under 5 USC § 301, "[a] taxpayer may, of course, seek oral technical assistance from [the IRS]" but "[s]uch oral advice is advisory only and the [IRS] is not bound to recognize it". 26 CFR 601.201(k)(2). The bottom line is that you can't rely on IRS customer service agents to do your taxes for you.

That said, and with the caveat that we do not have all the facts so I cannot and will not comment on your specific situation, it appears that the IRS agent may have managed to state an accurate proposition of law here, although you may have misunderstood the significance (or lack thereof) of that accurately stated proposition of law.

The question of whether a receipt of money represents "rent" is really a question of property law, which is governed by state law. See Burnet v. Harmel, 287 US 103, 110 (1932) ("The state law creates legal interests but the federal statute determines when and how they shall be taxed."). See also two posts I wrote on December 11, 2015 and December 17, 2015, where I also relied on this proposition.

The rules very by state, but generally speaking (and with various exceptions), the core essence of a tenancy is that the tenant is "grant[ed] exclusive possession of designated space ..., subject to rights specifically reserved by the lessor". Am Jewish Theatre v. Roundabout Theatre Co, 203 AD2d 155, 156 (NY App Div 1994) (emphasis added). An arrangement whereby a person pays money in exchange for the right to share in use and occupancy of the premises is not a tenancy, but rather a licence (and the occupant is a "licensee"). Id. The money paid is not "rent" but rather "licence fees" (*) for the licence to use the property.

However, the more salient question is: Does the fact that the money is licence fees rather than rent change whether it is included in the taxpayer's income? And the answer to that question is generally "no". Gross income is defined to include "rents" (26 USC § 61(a)(5)), but it also defined to include "all income from whatever source derived", which surely includes licence fees. Regardless of whether the money is rent or licence fees, it is still included in gross income, and it is still subject to federal income tax, unless specifically excluded from income by another provision.

As you correctly note, one such exclusion is that gross income generally does not include gifts. 26 USC § 102(a). However, if money is a gift, it is by definition neither rent nor licence fees, because a necessary condition for a payment to be a gift within the meaning of the statute is that the payment of the alleged gift "proceeds from a detached and disinterested generosity ... out of affection, respect, admiration, charity or like impulses". Brown v. Commissioner, 47 TC 399, 408 (1967) (citations and internal quotation marks omitted), aff'd without opinion 398 F 2d 832 (6th Cir 1968), cert denied 393 US 1065 (1969). In other words, if the payment was either rent or licence fees, it could not have been a gift; and, by way of contrapositive, if the payment was indeed a gift, it was not necessary to analyse whether it was rent or licence fees because it could not have been either.

In conclusion, although the IRS agent probably stated an accurate proposition of law, that proposition was wholly irrelevant to the correctness of your position that the item was a gift. (Note that I express no view on whether your position is in fact correct.)

((*) An earlier version of this post used the term "royalties" rather than "licence fees", but after further review, I determined that "licence fees" is the predominant term in this context, so I decided to use it instead.)
« Last Edit: December 19, 2015, 05:35:27 PM by Cathy »

AlwaysBeenASaver

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #91 on: December 18, 2015, 08:00:57 PM »
Cathy - not going to quote that whole thing to save space, but thanks for the interesting information, never heard of that concept of royalties before. What's done is done, and I do always try to be accurate and correct on my taxes, thus the phone call to the IRS, which I'm aware (and was also aware at that time) is not legally binding to them, but without paying a bunch of money to a tax preparer, and without spending several months researching tax law, was the best option I had at the time. This was a long time ago and the "web" was not much of a thing back then.

okits

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #92 on: December 18, 2015, 08:02:09 PM »


There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)


And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!

You know... While we're on the topic of things bitter pieces of shit do after breakups.

Amazing that idea would even cross someones mind.

I once had a tax professional tell me the top sources of tip offs for tax cheats: bitter exes and jealous neighbours.  I don't think too much surprised him, anymore.

puglogic

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #93 on: December 18, 2015, 08:23:36 PM »
I don't want to rent from my life partner. 

I want to be on the mortgage, so we have a joint interest in our home.  If we can't afford for me to be a 50/50 partner, then the choice of a place to buy needs to change so we can.  And if that's just impossible, then I wouldn't buy into it.

I wouldn't care if it's fair market value or not.  From the way he's managing this disagreement, I see some huge red flags flapping....sadly, red flags that i've ignored in my life.

You may both be much happier just staying where you are and continuing to see where the relationship goes.  But really it's whatever you're comfortable with.
« Last Edit: December 18, 2015, 08:38:02 PM by puglogic »

JoeBlow

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #94 on: December 18, 2015, 08:45:30 PM »
I would not do it. He should want to help you. He is the only one gaining anything.

I disagree.  I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.

Cathy

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #95 on: December 18, 2015, 09:01:09 PM »
Cathy - not going to quote that whole thing to save space, but thanks for the interesting information, never heard of that concept of royalties before.

I should clarify that my use of the term "royalties" for payments made in exchange for a licence to use real property is not really a common use of the term. Most judicial opinions either carefully avoid using any term for this concept or they use lengthier terms like "payment for use and occupancy". The term "royalty" in its most broad sense "commonly refers to a payment made to the owner of property for permitting another to use the property", but it is rarely used when the property is real property. Sierra Club v. Commissioner, 86 F 3d 1526, 1531 (9th Cir 1996). I probably should have picked a more common term, but I make this follow-up post to clarify that you may see other terms instead.
« Last Edit: December 18, 2015, 09:05:13 PM by Cathy »

monstermonster

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #96 on: December 18, 2015, 09:44:39 PM »
I don't know if you found this, but this might be helpful as I went though the same thing with my partner I don't even expect to be "life partners" that I've been with for 1.5 years. Here's the thread.

I had a LOT of guilt about moving into a fancier apartment with him because my rent would be going up $200/month to SHARE a room instead of having a room of my own. His would be going down $500/month. He earns 3.5x what I do (and owns 2 other houses he rents). In the end, we ended up deciding on me paying $550/month and him paying $900. I felt awful guilt about it, but the way i looked at it was 1) he was going to move to this place anyway so anything I contributed would save him money 2) he initially said, and I quote "I kept trying to think of a reason why this didn't make sense, and I didn't like it at first, but then I couldn't think of a good reason why I should avoid it" 3) he agreed it would be stupid for me to pay MORE to have less space ($550 for my own bedroom in a 2-bedroom to $725 to share a 1-bedroom- in your case a longer commute) but no matter what we did he'd be saving money.

We agreed on terms regarding a breakup (he would take over the lease because the apartment alone would be 50% of my gross pay, and only 8% of his.)

So we came to a proportional compromise. If he wouldn't have done so, I wouldn't have moved in.

charis

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #97 on: December 19, 2015, 11:10:22 AM »
I would not do it. He should want to help you. He is the only one gaining anything.

I disagree.  I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.

What he could get for it on craigslist is beside the point.   Only if she was already planning to pay at least that much for housing could she be seen as trying to take advantage of the situation.  He purchased the house of his own volition for an amount that he (supposedly) could afford.  This wasn't a joint decision taking her budget into account.  He wants her to move into his bedroom (not a craigslist room for rent) for the pleasure of her company and to subsidize his mortgage payment apparently.  She gains nothing except the pain of stretching her income for a while, while risking the demise of the relationship and no where to live when that occurs. 

Regardless of who is "right," this is an awful way to start a life together, if that is what you are trying to do.  Get a place that you can afford and see how things go for a while.

puglogic

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #98 on: December 19, 2015, 02:29:33 PM »
I will just add one point which hasn't been explicitly mentioned:

Would some people be saying something different if the genders were reversed? There was a thread I participated in a while back which had a very similar situation except it was the woman who was making more. A lot of the advice sounded like "If he doesn't pay 50/50 dump him!" "He's a slacker/moocher!" "Don't let yourself be taken advantage of girl!" etc.

http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-to-'charge'-live-in-boyfriend/

Just something to consider. Our expectations of gender roles and money can play a big part in our relationships.

So it sounds like your boyfriend is OK with you paying 900$. Clearly he isn't married to his original idea that you should pay exactly 50%. So it comes down to whether you're OK with it:
-Would you pay less if you lived by yourself? Do you pay less now?
-Is living together important enough to you to endure the longer commute?
-Are there compensating advantages to the house that you would enjoy? Having a backyard, gardening, hosting barbecues etc.?
-Is his attitude towards money a long term deal breaker for you?

Super wise, level-headed advice and questions from rweba. 

rmendpara

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Re: Moving Into Boyfriend's House - Fair Rent?
« Reply #99 on: December 19, 2015, 02:33:52 PM »
I think it's somewhere in between, and you are both mixing personal feelings about one another with a decision to move in together.

If you were just two friends (non romantic) or strangers trying to share an apartment or house, you would split rent 50/50 in most cases. Since the house is more than you would get otherwise (your alternative is a $2,000-2,500 apartment in LA), that seems like the right proxy as what is "fair". $1,000-1,250 plus personal expenses is what you would pay for sharing an apartment with a stranger.

In the case of renting, some outside landlord owns the property and may or may not have a mortgage. If your boyfriend owns the home or if you just rented together, why does that matter? Obviously, if there are savings, you should both be able to share in some of that.

On the "low" end, you would pay proportional to income. Given he makes 2x your income, that means you would pay ~1/3 and he pays ~2/3. The best next alternative to the house would be a shared apartment somewhere, so 1/3 of $2,500, or $833 plus utilities/food/etc on the low end and up to $1,250 plus utilities/food/etc. on the upper end.

Personally, as a male, I wouldn't want to feel like someone was "living off me" if we were not engaged or seriously considering marriage. Until that happens, you basically have separate finances. What if you made 2x his salary, then would you still feel comfortable splitting expenses proportionate to income? You can get into a crazy detailed analysis about the "right" amount, but you need a few basic things solved:

1) no hard feelings from either person, because no one should feel taken-advantage of...
2) your cost should be somewhere in between proportionate by income and 50/50 for your alternative (on a $2k apartment, that's $667 - $1,000 plus shared costs or on a $2.5k apartment, that's $833 - $1,250 plus shared costs)
3) what would it cost for you to rent a bedroom in a house somewhere else? If that's much lower than #2, that's another benchmark to what's acceptable

$900 all inclusive seems very fair to me, no? It's right smack in the middle of being proportional to income and 50/50 for an apartment, and includes everything. You are saving compared to what you would pay otherwise, and he gets reasonable cost sharing, fair enough?

Edit: Just be aware that things may be different if you reverse the situation, and it's wise to put yourself in boyfriend's shoes before rushing to break up or anything. Previous post by PUGLOGIC is a solid link. Seriously consider what you would request if your incomes were reversed, and what would feel "fair" in that situation. Proportional to income makes more sense when you are engaged/married/significantly considering the next step or having shared finances.
« Last Edit: December 19, 2015, 02:38:03 PM by rmendpara »