A few additional comments:
- As mentioned by @Anonymous_, this area is not a model of clarity in how this is presented.
- I would not report this on Schedule C unless, as noted by @Mike9241, you provided substantial services as noted in the facts of the CCA provided by @Anonymous_.
- The 7-day exception just determines whether the activity is a rental activity, not whether it goes on Schedule C or E.
- As we can't see how the prior return was completed, we don't know if any losses were carried to form 8582; they should.
- Also, since you indicate you fall within the 7-day exception, you will not qualify for the potential $25,000 exception to the passive activity loss rules.
- Bottom line, I believe the activity should be reported on Schedule E.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
