I've got a situation where a person has filed in the past claiming the rent he receives from a tractor trailer he rents to a company, on Sch. E. I can't find any support for this as everything seems to point that the rent receipts should be reported on a Sch. C/C-EZ.
Which is the right method? TIA
Follow your pointers! (grin) Yes, schedule e is for rental real estate and royalties. Equipment rental goes to schedule c.
ChEAr$, Harlan Lunsford, EA n LA
The rental of personal property (equipment) is a Schedule C activity. Schedule E rentals are real estate, excepting hotels (where the average stay is 7 days or less).
sometime in the recent past Wilson posted this:
Thank you to those that responded to my question. Your answers confirm my suspicions.
This was, I'm sure, another case of taxpayers trying to avoid the 15+% self-employment taxes. If the government really wanted to stimulate the economy (since small businesses create most of the jobs in this country,) then rolling back half the SE taxes would do it nicely. Certainly, it would be more direct than merely reducing income tax at the upper end as at least it goes directly to a business person in the trenches.
You may also want to look at personal property rentals which are reported on Form 1040, lines 21 and 36. Only the line 36 instructions mention this.
-- Drew Edmundson, CPA Cary, NC
sometime in the recent past Drew Edmundson posted this:
Thanks for that info. That takes me in an entirely new direction. This person's regular business is truck driving, but he rents out his other truck. The rents run about $100K with about $50K in expenses. As I see it, I would reference the 'PPR' on both ln. 21 & ln. 36.
If his regular business was renting tractor trailers, then I can see that it should go to a Sch. C.
That "PPR" treatment is not for continuing rentals of personal property. Since he is renting other truck as a regular activity, it's still schedule c.
ChEAr$, Harlan Lunsford, EA n LA
It isn't quite that simple. You have to determine if it is a trade or business. Continuity is one factor and at $100,000 it seems it may very well be a business to report on schedule C. More details are available in Pub 535 on page
Drew Edmundson, CPA Cary, NC
Oops, should be Pub. 525. Sorry.
Drew
sometime in the recent past Drew Edmundson posted this:
Drew, I'm not sure what you are pointing at on pg. 16 of Pub. 535. The IRS site has the 2007 Pub. 535 posted and I can't see how info on pg. 16 relates to this.
sometime in the recent past Drew Edmundson posted this:
Thank you, that's better.
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