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Self employed
Hello @Crgroadrebel88 , great question!
If you meet the following criteria:
- More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate.
- You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate.”
Then you will file a distinct Schedule C for your business buying/renovating/renting out rental properties. In general, you will consider all the property you own to be business assets, and the rental income will be considered business income. Here is a link with information geared toward real estate professionals: https://turbotax.intuit.com/tax-tips/self-employment-taxes/tax-tips-for-real-estate-agents-and-broke...
If you do not meet both of the criteria above, your activity renting out the property will be claimed on Schedule E as passive rental income. Here is a great link that describes in great detail how passive rental property income is taxed and all the tax implications: https://turbotax.intuit.com/tax-tips/rental-property/real-estate-tax-and-rental-property/L3e09vT71
Either way, rental property is a great income source and good on you for chasing your dream!
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