I have an apartment, and take on a roommate. He pays something toward the rent.
Is this “income” for me?
Argument in favor: it’s money I can spend for other things.
Argument against: it goes to the landlord, not to me.
How should I figure this? If the money comes to me, and I give it to the landlord, it’s my income? But if the roomie writes a check to the landlord, then it isn’t my income? Should I be careful never to touch the money?
Technically, yes, it would be gross income.
But you could then take a deduction for a reasonable part of the rent you pay to the landlord. This would be on Schedule E, not an itemized deduction.
If say your landlord charges you $2000 for rent and your roommate shares half the apartment and pays you $1000, you could reasonably deduct $1000, leaving you with no net income.
But if you do something funky like charge the roommate $3000 in rent, then you have income on which to pay taxes.
In practice, nobody reports these kinds of payments unless they have the IRS breathing down their necks for some reason. Making the check payable to the landlord (if the landlord is willing to accept it) is a reasonable precaution.
Technically you are a subletting landlord, and as Alley Dweller says, technically your roommate’s payment to you is rental income. However, against this income you can offset the expense to you of being able to provide the living space to your roommate. Your expense is an appropriate proportion of the rent that you are paying plus other household expenses. If you’re not turning a profit by charging him a greater proportion of your expenses than are fairly attributable to the proportion of the apartment that he occupies, then you can reasonably claim that your expenses as a landlord are equal to 100% of your income as a landlord, and you have no tax to pay. Strictly speaking you should fill out Sch E, showing that these numbers net to zero. Under such circumstances, if you don’t bother with Sch E, you’re guilty only of failing to fill out a form, not of underpaying tax.
Legally, Reimann probably has you covered.
Realistically, don’t worry about it. The IRS doesn’t care.
It is not your income, it is the landlord’s income. The landlord is getting full rent per the lease, whether one or two people pay it. Rent sharing is not leasing.
Not if he pays you cash. 
N.B. That is a joke, and is NOT a recommendation to do something illegal.
This would be true only if both roommates had signed the lease.
This is not the situation that Trinopus described, in which (as I understand it) he has sole obligation to pay his landlord the entire rent for the apartment. Trinopus has a separate informal arrangement with a roommate. Technically, I think Trinopus is subletting.
As I described, under these circumstances I think the technical requirement is to fill out Sch E, even if only to show explicitly that no tax is actually due from this arrangement, which would be true if the overall economics amount to the equivalent of rent sharing. For the average person with otherwise simple tax affairs, it’s seems unlikely that the IRS will care too much about the absence of the Sch E paperwork provided that no tax is actually being underpaid. I might just keep documentation of rent paid & received and household expenses, just in case.
Technically, you are probably right, I admit. Practically, this is not a taxable event (or series of events). Nobody is going to fill out the schedules and report to the IRS, I would venture.
If the second roommate is paying the first roommate an amount less than what the first roommate is paying the landlord, then the most you can accuse the first roommate of doing is running a money-losing business. Is a business with negative cash flow required to file taxes?
I my friends and I order a pizza and I pay the delivery man after taking up a collection from my friends, am I a restaurateur?
First, the question is not whether the second roommate is paying less than 100%, it is whether the roommate is paying more or less than his fair proportionate share, calculated on some reasonable basis. If he is paying you more than a fair proportionate share of your expenses for the use he gets, then you are turning a profit on the exercise, taxable profit.
As for your second question - well, it depends. For a real business, there may be statutory requirements for filing accounts that go beyond whether tax is actually due. And for taxation, the question is that you may be called upon to prove that you were making a loss.
For an individual with an informal sublet like this, at most it’s only a question of the paperwork of Sch E, which in this case would simply be proving the fact you are not turning a profit on the exercise, i.e. documenting that no tax is due. If you don’t bother filling out Sch E (and probably the vast majority of informal sublets like this do not), my guess is the worst that might happen is that an IRS audit might ask for that documentation, i.e. records of what you paid the landlord, your other expenses, and the income from the roommate. And unless the superficial numbers look obviously egregious (e.g. a roommate in a rent-controlled apartment paying much more than a proportion of the controlled rent), then I’m sure the IRS have bigger fish to fry.
My Bro the Retired IRS agent, sez that the IRS would not bother with this. It’s just splitting the rent. Dont report this.
Unless you make a profit, which is unlikely.
No, you are a profiteering pizza distributor (if you charge them more than their fair share).
I’d be more worried about your landlord giving you trouble about illegally subletting your place and maybe voiding your lease. I don’t know where you are or what your lease or local law says, you’ll have to assess that risk for yourself.
This was what I was mildly afraid of…
…But this sounds like what I’ll end up doing.
Thank you both and all!
Grin!
Oh, I cleared it all with the landlord before the roomie moved in! I’d have never done anything without the landlord’s knowledge and permission! You’re very right; that would be a violation of the lease!