If i own a salon and collect rent for my chairs, is that considered rental income?
Yes. But how it's reported on your tax return depends on your business structure. Lets assume your business is a sole proprietorship or single member LLC.
If you are "in the business" of doing other's hair, then you are self-employed and that income is reported on SCH C as a part of your personal 1040 tax return. The "rent" you are paid would be treated the same as all your other business income and included in the total business income received by your business. In other words, the chair rent is paid to your business, and not to you personally. I have "rent" in parenthesis because what you call rent, could actually be called other things. For example, if you charge on a per-client basis, then that income would be more akin to commission income. If you charge a percentage of what the renter makes, that would be another form of commission income. If you charge per hour or per day, that could be considered rent.
Overall, if you are "in fact" running a SCH C business, then all income including what you charge for "chair rent" would be reported as income "to the business" on SCH C.
One major requirement for a rental business to qualify as a SCH C business, is that you must provide your tenants (or "clients" in your case) continuing services on a recurring basis that are "directly benificial to the tenant/client".
I'm sure tat you do "in fact" provide recurring services on a regular basis to your renting clients. For example, I'm sure you provide them at least "some" of the things they use in their day to day conduct of business such as brooms to sweep up cut hair with, dustpans to collect it in, and trashcans to dump it in, as well as you pay for the pickup of that trash on a recurring basis. You also privide the sinks they wash hair in, along with the water they use to wash that hair.
So in my book, there is no question you operate a SCH C business and "ALL" business income from "ALL" sources would therefore be reported on SCH C. Nothing gets reported on SCH E.
