Not for profit rental

[MAMalody]

I have a client who has a "rental." I have determined it is not for profit, therefore not able to take a loss. I can't figure out how to do that in the ATX program. Anybody have this figured out?

[OldJack]

I have a client who has a "rental." I have determined it is not for profit, therefore not able to take a loss. I can't figure out how to do that in the ATX program. Anybody have this figured out?

If you think it is not a rental for profit and your client thinks it is a rental you should send the client to another tax preparer.

[TAXBILLY]

I have a client who has a "rental." I have determined it is not for profit, therefore not able to take a loss. I can't figure out how to do that in the ATX program. Anybody have this figured out?

Page 17 of:

http://www.irs.gov/pub/irs-pdf/p527.pdf

taxbilly

[MAMalody]

Old Jack:

There is no reason to refer to another tax preparer just because I think he has a not-for-profit rental. First, it was a self-prepared return and he made his own determination. Second, even if it was professionally prepared, the fact that I would disagree with another preparer does not make me wrong and him right, or for that matter the other way around. It simply means that I fully research my determination and show/explain that to the client, assuming that research supports my preliminary determination.

Taxbilly:

Jeez, I don't know why I forgot that a not-for-profit was not reported on a Schedule E. I simply took his data and entered in in my program and upon getting some additional data and information made the not-for-profit determination. Since ATX already had the E set up, it must have locked in my thinking. I will have to review all the info to make sure I am on the right track and nothing else is "locked in."

Thanks for the time, folks.

[OldJack]

Old Jack:

There is no reason to refer to another tax preparer just because I think he has a not-for-profit rental. First, it was a self-prepared return and he made his own determination.

Your original post did not indicate that the client determined it was a not-for-profit rental. You only said that you had determined it was not-for-profit.

[jainen]

>>Page 17 of: http://www.irs.gov/pub/irs-pdf/p527.pdf<<

According to this citation, not-for-profit rental income is reported as Line 21 Other Income, with expenses (not exceeding income) in one of more places on Schedule A or L. I don't see anything wrong with the original post. In my opinion, it's appropriate for the tax preparer to make this determination, presumably in consultation with the client.

I hadn't considered it recently, but the pub gives a definition of for-profit that does NOT require the owner to charge fair rental value. (In my opinion, the tenant would have to not be a family member for this to apply.)