USA Rent from extra rooms

[Failsatheals]

I am a soon to be homeowner that is planning on renting rooms to friends. My main concern is on the process to take the funds from tenants and putting it in my accounts.

With the nature of my loan i am unable to have it as a rental property and by no means would i be profiting from rental rates compared to my mortgage.

A friend takes all the money given to him and puts it in a separate bank account through out the year and transfers it to his person account at the end. This seems to cause a red flag if i am transferring 10k to myself at the end of the year.

From an accounting perspective i dont know the best way to go around all this.

 

[Steve-LevelUp]

There really is no way around this. Rental income would need to be declared as income. Although you are officially not allowed to rent it out by the mortgage company, if you also plan on living there, then I don't think there is anything the bank would do. Additionally, if the bank sees funds being deposited to the bank, their only care would be in complying to anti-laundering laws and not about matching the funds to potential rental income to contrast to your mortgage agreement.

If you can, leave the funds out of the bank account entirely. You will still need to declare the rental income on your tax return.

 

[Failsatheals]

I had not thought about this until now, but as i mentioned i used a first time home buyers program which was determined off income. I guess i will need to fins out what happens when i exceed this income amount since i know i will even with one tenant.

If i am going to list the funds as rental income then shouldnt it nit be a problem to add them to an account since i could prove their source?

I might need to find a local accountant to help work this all out for me. I do appreciate the reply!