Allowing a Roomate to Move Out
My question involves landlord-tenant law in the State of: Kentucky
My boyfriend and I are planning on moving into our first apartment together. The biggest problem is the fact that I need to bring my mother with me as well, as she is ill and needs someone to take care of her.
My boyfriend is rather hesitant about living with me AND my mother, which I understand completely. So we figured that getting a large apartment with plenty of living space would be a good way to try out this living arrangement before making a big jump such as buying a house. What I planned to do was have him pay 1/3 of the rent, and I would pay 2/3.
While discussing this, I mentioned that he could move out if the living arrangement wasn't working out. And at that point I would be willing to pay the full rent. Afterwards, though, I realized that type of arrangement may add a lot of complexity regarding subletting, leases, and taxes.
At first I figured I could just have my own name on the lease, have him pay me his part of the rent, and I would pay the landlord in full. But then according to my research, I would have to report the payments from him as income taxes. Is this true?
I also considered having him just pay the landlord directly. But apparently if I am the one legally obligated to pay the lease, then I would have to report his payments to the landlord as income the exact same way. Is that also true? And would a landlord even accept payments from someone who isn't on the lease?
Another option is that we could both be on the lease with the legal obligation of me paying 2/3 and him paying 1/3. But then, if he needed to move out, we'd be in the same boat again because I would be paying the landlord 100%, and he would have to report the 1/3 of his rent I am paying for him as income tax.
I really want to avoid over-complicating our taxes. I simply want to give him the option to move out so he is more comfortable with the arrangement.
Do you think it is possible the landlord would understand this situation and have a clause in the lease to allow my boyfriend to move out at one point and modify the lease to be completely in my name? If I ask the landlord this would they see me as a risky tenant or something and not even want to rent to me in the first place? Ultimately it probably depends on the landlord but like I said I don't want to jeopardize the possibility of getting an apartment at all by asking about this. So I was hoping to get some ideas here first before I go that far.
Thank you for any suggestions or advice!
Re: Allowing a Roomate to Move Out
I'm going to answer this from a landlords point of view...
When adults move into one of my rental properties, ALL adults who will be residing there must sign the lease. ALL would be legally responsible for the rent (most leases have a clause that state something along the lines of tenants being "jointly and severally responsible for the rent). That means if one moves out, the others remain financially responsible for ALL the rent.
Frankly, I wouldn't rent to your boyfriend if he isn't on the lease. Or mom either. And as a landlord, I wouldn't particular care if your boyfriend is comfortable with the mom arrangement or not. I'd be more concerned that my rent requirements are being met.
Why do you believe if your boyfriend is paying 1/3 of the rent and you're paying 2/3'ds this has anything to do with income tax? It doesn't.
Gail
Re: Allowing a Roomate to Move Out
I got the idea about the income tax from this thread here: http://www.justanswer.com/tax/2km9z-...ment-rent.html
"If you and the room mate were paying rent to the landlord directly together, then you do not have to report income.
However since you pay rent to the landlord on your lease with him, and then rent space to a room mate, then you have to report that as income.
Likewise, if it is your lease and rent obligation for which you alone are obligated, and the room mate pays the landlord for you, then you still have to report it as income.
In order to avoid this as income, you and the room mate have to be legally obligated for the basic rent and pay your fair shares to the landlord."
So as a landlord, when you require everyone to be on the lease, you don't really care who pays the rent or in what percentage as long as you get the total amount on time? On the application for the apartment where I would like to live, it has one section for the person applying for the apartment who will be the leesee, and then another section for people simply occupying. This implies that only the leesee would be responsible for the rent and the others are just occupying. But perhaps I am wrong and if the leesee defaulted they would try to get the rent from one of the occupants instead?
Ultimately it is probably just going to come down to me asking the landlord about it. Thank you for your insight so far!
Re: Allowing a Roomate to Move Out
Quote:
Quoting
kjm1986
I got the idea about the income tax from this thread here:
http://www.justanswer.com/tax/2km9z-...ment-rent.html
"If you and the room mate were paying rent to the landlord directly together, then you do not have to report income.
However since you pay rent to the landlord on your lease with him, and then rent space to a room mate, then you have to report that as income.
Likewise, if it is your lease and rent obligation for which you alone are obligated, and the room mate pays the landlord for you, then you still have to report it as income.
In order to avoid this as income, you and the room mate have to be legally obligated for the basic rent and pay your fair shares to the landlord."
So as a landlord, when you require everyone to be on the lease, you don't really care who pays the rent or in what percentage as long as you get the total amount on time? On the application for the apartment where I would like to live, it has one section for the person applying for the apartment who will be the leesee, and then another section for people simply occupying. This implies that only the leesee would be responsible for the rent and the others are just occupying. But perhaps I am wrong and if the leesee defaulted they would try to get the rent from one of the occupants instead?
Ultimately it is probably just going to come down to me asking the landlord about it. Thank you for your insight so far!
Generally the IRS is not too interested in a roommate/apartment situation. Why? Because it results in zero taxable income whether its reported or not.
Lets say your boyfriend pays 500.00 a month towards rent of 1500.00. You are going to put 6000.00 on your Schedule E as rental income, and 6000.00 on your Schedule E as expense, (the rent paid to the landlord for his share) which results in net taxable income of zero.