[Locke]

Originally Posted by Regorium

There's no benefit to claiming your rental income other than the fact that it's the law. The reason being there's almost no chance that your rental income is lower than your expenses related to the rental. So you'll have extra income that you'll pay tax on.

If you want to do a cash only under the table thing with your tenant that's your prerogative.

This is not entirely true, it depends on the factors surrounding the Mortgage Interest. Mortgage Interest is front-loaded, your first few years into a new mortgage is heavily weighted to interest versus principal and as such, depending on the other factors, a rental could be generating a tax-loss.

Further, if its an older house and required fairly extensive renovations to make rentable some of those are also deductible.

Or, if the previous tenant trashed the hell out of the place before they moved out, some of those repair expenses are deductible as well.

Originally Posted by Frequitude

And even if expenses somehow exceed rental revenue, I don't think you can write the loss off against other revenue like job wages. Could be wrong though. Again, paging Locke.

Negative, rental income/loss is treated as normal income. Any loss on a rental property can be deducted against normal salaried income and generate a loss leading to a refund.

Its because of this that the rules surrounding rentals are so sticky.

Originally Posted by Cflames_12.5

Yes long story but in laws needed help so we moved and rented our house. But our names our on 2 mortgage payments. I should also mention seems very important now. I have been renting my house for about 6 years. So I'm probably screwed this tax year.

It all depends on the circumstances, but if you've been renting it for about 6 years I'd wager that you're past the initial heavy mortgage interest phase and would likely be generating a taxable profit.

Thats not to say thats the case, like I said it all depends on the specifics for all I know you're renting out 'Professor Xavier's School for the Gifted' and it's been destroyed several times and you possess some significant tax-deductible losses as a result.

But typically people with rental properties flip them after 4-5 years or engage in Equity transfers to keep those front-loaded interest deductions coming or re-finance with one or more other rentals.