tax on renting half a property bought with a friend

[nek]

hi Folks
bought a house with a friend a couple of years ago
we're both looking to move on with our lives

selling is currently not an option as current value is appox 230K of 350k owed on mortgage

we're concidering renting to eachother the others half
-we're always 50:50
appears to be the best way - concidering the TRS & tracker

if the mortgage everymonth is 1300 and interest being around 650

and the rent on half is around 500
would there be tax due, if the other was paid 500?

or

would "the rent" be better off just going against the mortgage, avoiding the tax

keeping in mind... i want to stay completly legitimate

hope this make sense

thanks in advance

 

[huskerdu]

hope this make sense

Sorry but it doesn't make sense to me, at all.

Can you clarify the following

Are you both living in the house ?
Does one of you want to move out and have the other one pay you rent for your half of the house, or get tenants?

 

[nek]

hi Huskerdu

Yes one will move out
and will rent his half to the other