DavidS127
Expert Alumni

Investors & landlords

It depends on the nature of the rental property you own.  The choice to treat it like your accountant did last year is available "when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer". Otherwise, the property is treated as a rental property (reporting rental income or loss).

 

IRS Publication 527 at this link has this definition of "providing substantial services":

 

"Providing substantial services.

If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services don’t include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For more information, see Pub. 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040 or 1040-SR), Self-Employment Tax. For a discussion of "substantial services," see Real Estate Rents in Pub. 334, chapter 5."

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