Author Topic: Ever run the numbers/tax savings of renting out rooms?  (Read 1624 times)

Bearded Man

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Ever run the numbers/tax savings of renting out rooms?
« on: February 09, 2016, 05:39:19 PM »
I've run the numbers for deductions of interest, tax and other expenses, as well as depreciation, using the number of rooms method as opposed to square footage (http://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-out-room-your-house.html). A shared housing arrangement can put extra money in your savings/pocket and reduce your tax liability/shield the profit, all while paying down your mortgage. Going to have to give the room mate thing a go.



GrowingTheGreen

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Re: Ever run the numbers/tax savings of renting out rooms?
« Reply #1 on: February 09, 2016, 08:13:30 PM »
I've got a good friend that does this.  Not sure if he does it legit--i.e. report everything on taxes.  I do know thought that he basically doesn't have a housing cost.  He bought a house with an FHA loan--yes, PMI included--and got a couple roommates.

Generally speaking, I thought the low down payment route was a bad way to go.  He proved me wrong.

Goldielocks

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Re: Ever run the numbers/tax savings of renting out rooms?
« Reply #2 on: February 10, 2016, 01:19:20 PM »
There are other ways to do this, too, especially for those with family situations:

1) Rent to a foreign student under 18 who is getting a year of "American english / high school".
2) Foster parent

Obviously both the above come with a commitment to provide security and caring for the minors..  then there is :

3) English experience - Home Stay -- e.g., for adults taking english locally, you provide a week of accommodation and family interaction.
4) bnb / couch surfing
5) Boarders, other -- e.g provide meals and a room for university student

The key is an expensive housing market, a spare room, and a good location.

zephyr911

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Re: Ever run the numbers/tax savings of renting out rooms?
« Reply #3 on: February 10, 2016, 01:54:10 PM »
I rented out half of a house after moving in, and because half of my utilities, etc. all became rental expenses, and adding depreciation, etc, I had less taxable income after collecting something like $7K in rent.

JLee

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Re: Ever run the numbers/tax savings of renting out rooms?
« Reply #4 on: February 11, 2016, 10:03:02 AM »
I rented out half of a house after moving in, and because half of my utilities, etc. all became rental expenses, and adding depreciation, etc, I had less taxable income after collecting something like $7K in rent.

Before I learned about depreciation, I still did pretty well.. Once I learned about depreciation, I blew out almost $10k in 2015 rental income with room to spare.

Now I have to figure out form 3115 to fix my failure to claim depreciation for 2013 and 2014..