Do I have to report income from renting out a spare room in my house to a friend?

Generally yes — rental income is taxable, and you must report it on your federal return regardless of whether you receive a 1099. However, there is one important exception: the 14-day rule.

### The 14-Day (Master Bedroom) Exception

Under IRS rules, if you rent out your home (or a room in it) for 14 days or fewer during the year, you do not have to report that income at all. It is completely tax-free. There is no dollar cap — even if you charge $5,000 for those two weeks, it stays off your return.

If you rent the room for 15 or more days, the exception disappears entirely and all rental income becomes reportable — not just the days above 14.

### How to Report It (15+ Days)

If your situation doesn't qualify for the 14-day rule, you must report the income on Schedule E (Supplemental Income and Loss), attached to your Form 1040. The good news: you can deduct a proportional share of expenses related to the rented portion of your home:

• Mortgage interest or rent (prorated by the rented percentage of your home's square footage)
• Utilities (same proration)
• Repairs and maintenance specific to the rented room
• Depreciation on the rented portion
• Renters insurance costs attributable to the room

For example, if the spare room is 15% of your home's total square footage and you have $24,000 in annual mortgage interest, you can deduct 15% × $24,000 = $3,600 against your rental income.

### Does It Matter If It's a Friend?

Yes — if you charge a friend below fair market rent, the IRS may classify the arrangement as personal use rather than rental activity, which limits your ability to deduct losses. Charge fair market rent to keep full deductibility.

### 1099 Reporting

Your friend is not required to issue you a 1099 — that obligation falls on businesses and self-employed people making rental payments. But the income is still taxable to you regardless.