Schedule E?

[Tax Prep by Deb]

I have a client who rented out her RV last year.  Would this be reported on Schedule E?

[rfassett]

From the instructions for Schedule E:

 

　

　

Personal property.  Do not use Schedule E to report income and expenses from the rental of personal property, such as equipment or vehicles. Instead, use Schedule C or C-EZ if you are in the business of renting personal property. You are in the business of renting per-sonal property if the primary purpose for

TIP

E-4

　

　

renting the property is income or profit and you are involved in the rental activi-ty with continuity and regularity.

If your rental of personal property is not a business, see the instructions for Form 1040, lines 21 and 36, to find out how to report the income and expenses.

[Lee B]

If the RV has Cooking, Sleeping, and Bathroom facilities, I would report on Schedule E.

This would also include Houseboats and Sailboats.

[Tax Prep by Deb]

Any body else?  Also if on schedule E is it treated as residential rental at 27.5 years?  Or is it motor vehicle 5 years?  I've never had one of these and frankly don't really know which way to go.

Any suggestions?

[Lee B]

In my state a 12 X 50 mobile home is considered to be personal property.

Would you really report this rental on Schedule C or C - EZ.

[Terry D EA]

What we really don't know here is if the RV was rented just one time or is this something the client plans on doing in the future or is currently engaged in. Knowing those answers would help identify which form to use. If it was a one time use, I would use the line 21 mentioned above. If more than one time, then the schedule C would be my first choice. In my opinion, this would not qualify for the 27.5 year depreciation because it is not "Real" property. The OP says RV and motor vehicle which leads me to believe this is a motor home RV and should be five or seven year class.

[Tax Prep by Deb]

Did this several times during the year.  I have records that indicate it was rented out at least once every month for about 9 months.  It is a Motor Home and I was thinking of 5 year class life as well.  It's looking more and more like this will be schedule C income subject to self employment taxes?

[Lion EA]

Does she pay motor vehicle tax on it?  Or, real estate tax on it.  Is it anchored?  Or, do the renters move it &/or travel in it?  Does your client drive it to the renters.  Or do the renters go to the RV's permanent location?

[Roberts]

1 hour ago, Tax Prep by Deb said:

Did this several times during the year.  I have records that indicate it was rented out at least once every month for about 9 months.  It is a Motor Home and I was thinking of 5 year class life as well.  It's looking more and more like this will be schedule C income subject to self employment taxes?

If they rented it multiple times during the year like that - I'd call it schedule C. They are in the personal property rental business.

Plus I agree on the 5 years.

[DANRVAN]

Depends on the facts and circumstances. If not for profit it goes on line 21.

[Tax Prep by Deb]

It's definitely for profit.  She did very well in one year.

[MAMalody]

You may see more of this in the future.  Many of the trailer/motor home magazines are advertising this is a way to make money off your RV when you are not using it.

[Abby Normal]

I wonder how many of these people are properly licensed to lease vehicles and are charging all the appropriate lease taxes for their state.

[RitaB]

On ‎3‎/‎8‎/‎2017 at 8:44 PM, cbslee said:

In my state a 12 X 50 mobile home is considered to be personal property.

Would you really report this rental on Schedule C or C - EZ.

I just now figured out that you meant would you really report the mobile home rental on Sch C and not would you really report RV rental on Sch C.  I was really struggling trying to figure out with what you were trying to accomplish there.  LOL.

29 minutes ago, Abby Normal said:

I wonder how many of these people are properly licensed to lease vehicles and are charging all the appropriate lease taxes for their state.

Three.  In 50 states.  Three.

[Tax Prep by Deb]

She is actually using a service that books all of her reservations and collects the money then in turn gives her the net proceeds, so I would assume they are collecting any state fee's ect....

[rfassett]

1 hour ago, Tax Prep by Deb said:

She is actually using a service that books all of her reservations and collects the money then in turn gives her the net proceeds, so I would assume they are collecting any state fee's ect....

There is that ugly word .............. assume.  Those fees and taxes are ultimately your client's responsibility.  It would probably be prudent to at least ask the question.

[BulldogTom]

7 hours ago, Tax Prep by Deb said:

She is actually using a service that books all of her reservations and collects the money then in turn gives her the net proceeds, so I would assume they are collecting any state fee's ect....

I was all in on the schedule C, until you posted this.  If they are not actively participating in the rentals, they just hold the property and hand the keys to whoever shows up with the right paperwork, it might not be a trade or business subject to SE tax. 

I am not fully convinced myself yet, but if it was my client, I think I would be hitting the research a bit more.  It would be even better if the rental company sent a 1099 with box 1 rents filled in.

Hmmmmm....what appetite do you have for a fight with the IRS.  There may be enough here to send that income to a schedule E....or not.

Tom
Newark, CA

[DANRVAN]

3 hours ago, BulldogTom said:

 

Hmmmmm....what appetite do you have for a fight with the IRS.  There may be enough here to send that income to a schedule E....or not.

Income from rent of personal property does not go on Schedule E. If not a trade of business it goes on line 21.

[Lee B]

On 3/7/2017 at 2:51 PM, cbslee said:

If the RV has Cooking, Sleeping, and Bathroom facilities, I would report on Schedule E.

This would also include Houseboats and Sailboats.

The facts & circumstances of this situation has come out in bits and pieces.

I have changed my mind - Schedule C

[BulldogTom]

8 hours ago, DANRVAN said:

Income from rent of personal property does not go on Schedule E. If not a trade of business it goes on line 21.

Income in full to line 21, expenses to Sch A?  Is that what you are proposing?

Tom
Newark, CA

[rfassett]

If the income goes on line 21 the expense associated with that income can go on line 36 as PPR.

[Tax Prep by Deb]

I Guess I should have included the fact that she did receive a 1099 with the amount listed as rent.  She is clearly trying to make money at this, not just a casual thing.  Throughout the year between the company that sent her the 1099 and another that did not, she received about 6,000.  I also just found out it is not a motor home but a travel trailer if this makes any difference.

[DANRVAN]

15 minutes ago, Tax Prep by Deb said:

I Guess I should have included the fact that she did receive a 1099 with the amount listed as rent.  She is clearly trying to make money at this, not just a casual thing.  Throughout the year between the company that sent her the 1099 and another that did not, she received about 6,000.  I also just found out it is not a motor home but a travel trailer if this makes any difference.

Still personal property so the choices are line 21 or C.

From what you are saying the activity is carried out in a manner that  indicates a degree of recurrence, continuity, and availability as described in R.R.77-356.