For taxes you'd have to include the income as rental income on your tax return which gets taxed at your marginal tax rate just as you would if you rented the entire place out. You can deduct the corresponding amount of mortgage interest, taxes, etc related to the portion being rented out. In other words if you have a 2000 sq ft home and you rent out 200 sq feet (one room) you can deduct 10% of your mortgage interest, taxes etc.
Not 100% sure on the rental agreement but I believe you can add a clause in there that it can be ended upon a sale, but I think you'd still have to give 3 months notice.
|