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My question is: US-specific
QUESTION: I am a homeowner that has a roomate. We have no formal agreements but he pays me rent every month. I am wondering, since I made some improvements to my home this year, would it benefit me to claim the rental income and get deductions? What could I deduct?
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Don't - you will make your house taxable for captial gains tax in the future on the same percentage that you try and write off your expenses.
Also, improvements are not deductible "now" they must be depreciated over 27 1/2 years.
You are making life too complicated particularly if your roommate is a common-law partner and not a true tenant.
On the other hand, if your room mate is really just a tenant, then you are required to report the income you receive and you are allowed to deduct a percentage of the taxes, interest, repairs, heat and light that you spend on the house.
The percentage would be the percentage of the space that your room mate takes up. You cannot dedcut for common rooms that you use yourself so the only dedcution is for his or her actual bedroom and any specific space asigned or used exclusively by the other person.
Schedule E of your 1040 is the form to fill out.
david ingram
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