Subletting agreement income

Forum|Forum|2 years ago
March 23, 2024
1 reply
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In 2023, I subleased 33% of my mobile home to a tenant for about $700/mo. At the time, I was making payments on the mobile home to a banking institution who owned the home, I believe it was technically considered a LEIN. The land was and is rented from the mobile home park and is not owned by me; they also cover water/sewage/internet.

Currently, I'm filing the income from the agreement as miscellaneous income. I tried filling it out as a rental property, but it was asking for cost basis information under the assumption that I owned both the home and the land, when at the time I owned neither (now I own the home as I've paid it off in full as of January). However, obviously since this is miscellaneous income, it's taxed at the maximum value and there are no deductions on it.

I would like to know if there is a more appropriate way to file this so that I am able to deduct expenses from it, such as the monthly mobile home fees, maintenance, electric/gas, etc. Worst case, I'll just file it as miscellaneous income.

Best answer by CSKcpa56

First off, the note you were paying to the bank for your mobile home and land is a MORTGAGE not a Lien. renting out 1/3 of your home can be a rental shown on Sch E. Your cost basis is what the land and mobile home cost you. I'm not sure if you bought/rent the land under the mobile home. But at a minimum, the mobile home has a cost you paid to the bank. treating it as a partial rental will give you the ability to reduce the $700/month income by A PORTION of the water/sewer/gas/electric/property taxes/repairs, etc. Take the sf rented divived by the total sf of the mobile home. That will be the percentage to use.