Would I have to do a second sch. C for the rental business?
Maybe. As an "active participant" in the business you own, you could make the rental a SCH C business. In that case, the land will still not be depreciated and you *WILL* pay the additional 15.3% self-employment tax on the income. So you gain/lose nothing other than creating additional work/paperwork for yourself with no actual gain.
Reporting it on SCH E means that you don't pay the additional 15.3% self-employment tax. The downside is:
- The income does not count towards your social security or medicare
- The income does not count when figuring the maximum contribution you can make to an IRA/401(k)
So basically, either way all you're doing is taking money out of your left pocket, and putting it in your right pocket with no real gain. It basically serves no purpose.
