Renting a room to a friend and in a quandry

@suspenseful (40326)
Canada
June 4, 2011 3:29pm CST
I decided to rent a room to a young lady who is related to a friend I knew who now lives in B.C. She was living with her grandmother, but now that she and a young man are going together and in that pre-engagement stage, my friend here who is a nurse suggested that I rent a room to her. Now I want the company, but the trouble is they think that I should not declare the rent on my income tax because it is not that much. The trouble is that the rent will go towards getting the basement fixed, plus now I have to replace the fence, so I do not want tokeep all the cash in the house because it is dangerous, and if I put in the bank, the government might know I am getting extra income even that little amount. I do have an income tax account,and I do keep my own private records. If it were a tinsy amount like an extra $10-$20 a month, that could be disregarded, but between $100 and $300 will not go unnoticed. I know my friends mean well,and say that she will have to report what she gave over, but I know when I buy something, the government is not that interested, but if I make extra money they are.
3 people like this
7 responses
@dragon54u (31340)
• United States
4 Jun 11
You will save yourself a lot of trouble if you declare it! I've known people here in the U.S. that had a similar situation and did not declare the income and they eventually got audited going back a few years. They ended up owing a LOT of money, more than if they would have declared the income. Honesty is always the best policy and it sounds as if you want to be honest. The Bible says to "give unto Caesar that which is Caesar's" and it's very good advice for avoiding a lot of trouble!
2 people like this
@suspenseful (40326)
• Canada
5 Jun 11
Oh we got audited for 2009 because we not only had to fix up the house because of my husband being disabled, and they did not let us use tne baseboards, etc. Now I have to wait and cannot use the refund I got from 2010 just in case the income tax people want back, so I was hoping to use the money from the rent to start on the basement. Now part of the fence blew down in the wind, and she wants to get a dog. And you cannot have a dog if there is no place to keep it from running off.
@jillhill (37354)
• United States
4 Jun 11
I don't think that unless your income tax forms change much they are very concerned. I know others that make a ton of cash doing things that they are never even asked about. Like one of the girls I work with at Christmas sells treats...makes over $3000.00 a year in cash and has never been checked up on..and she's been doing it for over 30 years!
2 people like this
@suspenseful (40326)
• Canada
4 Jun 11
I think making candies on your kitchen stove is a bit different from renting a room. AFter all, the person bought the sugar, butter, eggs, etc. at the grocers, so she is merely making the candies and selling them. But when renting, someone has to come n the house. I did not pick them up at a grocery store. The utility people will notice that the lights would be on lolnger. She does have her own phone, and her own food, but they will notice the increase in energy.
@mansha (6301)
• India
5 Jun 11
Though tis a small amount and I know you are stuck up for money but honesty is the best policy, wait for repairs but do things honestly that way you will sleep better as tomorrow someone might report you or check on you then you will end up paying a lot in fines, best is to do our duty however hard it may be and do it right.
1 person likes this
@suspenseful (40326)
• Canada
5 Jun 11
That sounds like the right thing to do. I do not want to have to pay a fine and I am not that good at looking for records and cash receipts after the fact. So it easier if I know that ifI do record it, then I will not have any problem later on. I just did not want to get paid under the table, then suddenly be hit by a large income tax bill plus penalties. Besides I would not feel right about doing something illegal.
@KrauseHome (33368)
• United States
5 Jun 11
Well, this is one reason probably I am glad that I am not on Disability as they keep tabs anymore of almost everything you do if you want to get any assistance it seems. So it might be to your best interest to save this somehow in a safe place, and use it to fix things around the house as well. Because unless you know someone you could trust holding onto the $$, it is a hard thing for sure.
1 person likes this
@suspenseful (40326)
• Canada
5 Jun 11
I am not on disability, but because of the way my husband's will was set u, I cannot touch the money he got from our life insurnance. That is because his mother was not a good manager, and she gave money to every charity she could. So that means I have to save the money myself. That is part of the reason I took in a renter . And I do not know anyone who can hold onto the money. Also I want to get the fence done and the basement insulated, but since the garage is being used by a former neighbour to put his truck, there is not room to store the lumber so have to get it all at once.
• United States
5 Jun 11
Please report your extra income as you will surely get caught, especially since you have ported this information on the Internet. Any government is interested when you try to cheat them by not reporting income. People do not seem to understand that the government has all kind of software scanning for hints of hidden assets or any other type of cheating.
1 person likes this
@suspenseful (40326)
• Canada
5 Jun 11
Well I do not use my real name here on mylot and I sure have not put it on my other blog that has my name on it. So that would mean that anyone who is wishing to find out is sure to be ignorant because people would be afraid of asking because there are some spy out there who knows where they live, etc. But I know there are plenty of Grandmother suites and people taking things under the table and selling things under the table. The only trouble would be, if I did not report it , is if I put the money in the bank where eventually someone would find out. I do not think it has come to Canada what is now happening in the United States, but I do know that I have to report my bank interest, and they would be surprised if it suddenly shot up in one fell swoop. Besides reporting it would make things easier since then I could go ahead and save for the fence and the basement without any worry.
@GardenGerty (90967)
• Marion, Kansas
4 Jun 11
Hi, friend. If it is the same there as it is here, I would declare it, because you then would be able to deduct as a business expense a certain amount of the house payment or value of the house, as well as a portion of all utilities, and if she uses your land line, a portion of the bill for that. Usually you can show on paper that you actually spend more than you take in. If it is required by law that you report it, then it would be wrong not to, and that does not match with what I know you stand for.
@suspenseful (40326)
• Canada
4 Jun 11
I do not not like declaring it. I think with all the expenses that are needed, and having to save them over time and having to put some of the money in the bank, that the income tax people would get wise. Besides I would not feel right about not declaring it. And if I do want to get business from the people I know, I would not want them getting into trouble. And I certainly do not want to be limited to buying things on the street or just giving it all to offerings.
• Canada
4 Jun 11
If you Declare receiving it, they'll have to declare paying it? Is that it? I'd still opt to do the honest thing, because it'll keep everyone out of trouble, and you won't have money in the house. You could also look into renting a safe deposit box at a bank, and keeping it in there.
1 person likes this
@suspenseful (40326)
• Canada
4 Jun 11
I would declare it, but then I would have to keep records of what I buy from now on, and we have been in the habit of shredding our cash receipts and credit card statements while my husband was alive. We did not have that much room to keep tose hundred of cash receipts we got. And a safe deposit box, well I would not get any interest from it. If I was rich, ten it wold not matter.