Do I enter 1099-MISC income for subletting property I rent for my business in Sched E or Business Income?

[gl_sa_tax]

I rent an office. Two people sublet that office from me and that generates 1099-MISC forms, since they pay me more than $600. I do not own the office property. I am not in real estate. Where do I file the 1099-MISC info? I end up looking like I own the property, which I don't. 

[Carl]

Assuming the *business* sub-lets, then it's general income for the business. You won't do a SCH E for this at all. (Easiest and simplest way to go)

[gl_sa_tax]

thanks- helpful. However, the business is unrelated to subletting. Therapy office. Sch E? since sched C is business related?

[gl_sa_tax]

thanks- helpful. However, the business is unrelated to subletting. Therapy office. Sch E? since sched C is business related?

[TaxGuyBill]

It goes on Schedule E.

However, you need to make sure that only the business percentage of the expenses (including rent) go on your Schedule C, and then enter the rest of the expenses (the rental percentage) go on your Schedule E.

[TaxGuyBill]

@Carl   The IRS does not recognize a Schedule C business as being separate from its owner.  They are one and the same.  So even it the "business" is renting the place, the IRS sees it as the PERSON renting the place.

So the PERSON has to allocate expenses between what it is used for, (1) personal use, (2) business use (Schedule C) and (3) rental use (Schedule E).

The rental of office space is not subject to self employment taxes (assuming that "services" are not provided), so the rental does not go on Schedule C at all.

[Carl]

Thanks Bill. My train of thought was not along the "disregarded entity" lines, as it should have been.