Re: Female friend staying with me...need to report income?

jaynews wrote:

<<It just sounds like you are splitting expenses. There doesn't seem to be a
profit motive involved.

The splitting of expenses isn't a taxable event. >>

Was wondering what expenses would be considered as divisible between me and her without it becoming a taxable event? Reason I'm asking is in case I ever wanted to increase her contribution without it becoming a taxable event. Currently the expenses I consider to be "splittable" are regular expenses such as groceries, electricity, gas, telephone, cable TV, cleaning service (if we used one). I am assuming I am allowed to split these with her since those are ordinary expenses that don't affect the value of my townhouse.

You're asking about support. You could provide more than half of her support and take her qualifying-relative dependency exemption for yourself if she has sufficiently low income and lived with you all year. Or, she could be providing more than half of her own support, in which case her contribution to shared expenses has no effect on your income tax.

Your previous comment about "if it doesn't work out, she can't claim I've been financially supporting her" is not a tax issue.

-Mark Bole



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