I'm interested in renting out my computer to my family business. I see some information about reporting it on schedule E. Does someone have experience with this?

Forum|Forum|5 years ago
November 15, 2020
6 replies
50 views

Are there any negative impacts on the business or personal taxes?

TurboTax Premier Online

Anonymous

rental of tangible personal property (ie you computer), as opposed to real property, is reported on Schedule C and net profit is subject to self-employment tax

austintgAuthor

Level 2

Is it possible to use the schedule C EZ for this since I'm not deducting anything?

VolvoGirl

Level 15

I think you can report it just as Other Income on Schedule 1 line 8. See IRS 1040 instructions page 82

• Income from the rental of personal
property if you engaged in the rental for
profit but were not in the business of
renting such property. Also see the instructions for line 22.
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

Will they give you a 1099MISC for it? My old notes say......

Federal Taxes
Wages and Income
Scroll way down to the end - Less Common Income
Very last one….Miscellaneous Income - Click start or Update

Then the 9th item down is Income from renting out personal property - click the Start button

Or if you get a 1099Misc......

Scroll down to Other Common Income
Income from 1099-Misc - Click the Start or Update button

Then Add a new 1099Misc and fill out the form, The amount should be in box 1
Then next screen for Source pick the last one, Nonbusiness Income

Opus 17

Level 15

This whole thing sounds shady. You are not renting your property to an uninterested party, you are renting it to yourself. That seems pointless for one thing, since any expense you deduct on schedule E will be taxable to you on your personal 1040.

Are you thinking you could get a bigger rental expense deduction by charging a high rent, instead of taking a rather small personal deduction for business use of a personal computer (which would require documentation of the hours used in business, for example)?

What are you actually trying to do? If you have a large enough rental business, why not just buy a cheap PC to manage it, and deduct or depreciate that as a business asset? I don't like the idea that you can somehow charge yourself rent on your own personal property and come out ahead.