It depends. There are two possible ways to report rental of personal property.
- If you decide this is a business activity (self employment) for you, then you can deduct the expenses necessary to operate the activity of renting your trailer. This would include depreciation of the trailer over a 7year recovery period (deduct a port of the cost each year) or an election to expense it all in the first year. You can also deduct interest on the loan and any other expenses necessary to maintain the trailer available for rent.
- If you decide this is not a business activity and it is something that is done on rare occasions then you should report it as 'Less Common Income'. No deductions will be allowed in this scenario.
Personal Property Rentals (IRS Topic 414)
- Report income and expenses related to personal property rentals on Schedule C, as self employment, if you're in the business of renting personal property.
- Report income on line 8k and expenses on line 24b of Schedule 1, if you're not in the business of renting personal property.
[Edited: 02/24/2022 | 9:26a PST]
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