Schedule C or Schedule E?

Where, may I ask, do you find "authoritative" support for the conclusion that only services performed while the tenant occupies the unit are relevant to this determination? The "highest" authority that I can find (the IRC 1402 regulation that I quoted earlier) doesn't appear to make that distinction. Rather, it simply speaks of services rendered "for the convenience of" the occupant.

So, I do think there is a distinction between the two duplex rental scenarios you presented. In the case of the "furnished" unit, I believe a "facts and circumstances" inquiry would be called for to determine whether or not services were rendered for the convenience of the occupant (see reg for exact language).

But keep in mind, I'm perfectly open to being persuaded differently. All that would be needed is an "authoritative" source that leads to a different conclusion than the one I've stated above. ;-)

(Note to non-pros who might be reading this: "Authoritative" is a term of art. It means a source that can be cited in court as precedent. IRS publications, articles by H&R Block, opinions of tax preparers (including myself!), etc., are NOT in and of themselves "authoritative.")

Reply to
MTW
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That's definitely something to consider.

My "guess" as to the exclusion has always been that capital (rather than labor) was the material income-producing factor in the case of property rentals. Who knows ??? :-)

Reply to
MTW

I rely upon the plain language of the regulation. "Generally, services are considered rendered to the occupant if they are primarily for his convenience and are other than those usually or customarily rendered in connection with the rental of rooms or other space for occupancy only." I claim that when you rent a furnished unit for occupancy, it is usual and customary for the place to be clean before it is occupied. It is not customary to rent a furnished unit with soiled linens, dirty toilets, etc.

Reply to
Alan

I agree with that. But if that's it, the test is flawed. Paying someone to change the sheets every day or to cook breakfast is no less an investment of capital and no more providing your own personal services than merely providing someone a place to sleep without additional services.

Reply to
Stuart O. Bronstein

I guess you stay at different places than I do. :-)

Reply to
Stuart O. Bronstein

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