They say they recognize local laws concerning cohabitation, but how old is that statement?
After Lawrence v. Texas in 2003, most (if not all) lawyers would agree that statutes or ordinances against cohabitation are unconstitutional invasions of privacy. So they should be treated as if they don't exist.
For this purpose income is any money that comes "in." Though you are correct that cost sharing is money that actually goes to someone else. The problem is going to be tracing the money you give to establish exactly where it goes.
I think you are trying to be too cute and there is a remote possibility you end up shooting yourself in the foot.
Comments/Suggestions:
- Do not ever call it rent again. What you are doing as a couple is 'cost sharing' so you should treat it like 'cost sharing'.
- Do not give her money. Instead, directly pay for common household expenses yourself. Electric, Gas, Cable/Internet, water/sewer, food, entertainment... If your cash doesn't flow thru her checking account, it will be more difficult for the IRS to categorize the money you pay as rent (assuming you quit calling it rent). It would also be useful if the total amount you pay varies from month-to-month and doesn't always equal precisely $500.
- The last thing you want is a rental agreement. If you really need an agreement in writing, do a "Cohabitation agreement".
Good Luck!
It's starting to sound like it would be easier if he just bit the bullet and married the girl. :)
"It's starting to sound like it would be easier if he just bit the bullet and married the girl. :)
Why would ownership matter? Lots of people share homes and apartments that they rent as roommates. How is this any different? I've never had a roommate myself (except in college dorms), but I imagine that a common arrangement is that one of the roommates pays the bills, and the others pay him their share. While it might be easier to substantiate if there were a separate bank account for the household, I doubt that most roommates go to this trouble, they just designate one of their personal accounts as the pass-through entity.
You're just paying for your share of the utilities and other household expenses, right? The only difference in this case is that she's not paying rent or a mortgage, so you shouldn't have to pay for a share of that.
"It's starting to sound like it would be easier if he just bit the bullet and married the girl. :) "
Upon further thought, would marriage necessarily change whether the IRS considers payments in this situation rental income?
In theory, one person could own the house, you could have a prenup that says under no circumstances will I ever get the house (so it's not really my property either) and I could pay rent to my spouse to live there. Why would me marrying her necessarily change things?
unlimited amounts of marital gifts are tax free.
"unlimited amounts of marital gifts are tax free. "
The amount of the gift tax isn't relevant to me here because whether I'm married to her or not it doesn't cross the threshold at the amount of "rent" I'd be paying. The question really is what per se does being married, given that the amounts in question whether married or not don't cross gift tax exemptions, change in this scenario?
Dick, I don't know if this is good news or bad, but some goddamned lawyer already wrote your book, though his title was not nearly as interesting as yours.
The book is entitled Whether to Wed, and was primarily aimed at the LGBT community, though the points dealt with are relevant to all couples these days.
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