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jblazekh
New Member

Do we file C or E? We have vacation rental, which is rented part time. We have EIN since we tax the rentals. When receiving the EIN, said to file a 1065 last tax year.

 
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PatriciaV
Level 7

Do we file C or E? We have vacation rental, which is rented part time. We have EIN since we tax the rentals. When receiving the EIN, said to file a 1065 last tax year.

How you report your rental activity depends on several factors.

If you have formed a company to handle the rentals and applied for an EIN, the IRS expects to receive a business tax return (Form 1065) for this company. This is typical for a company owned by more than one person. You may use TurboTax Business to prepare the business tax return.

In this case, all rental activity (income, expenses, and assets for depreciation) is entered and reported on the business tax return. The owners receive Schedule K-1 to enter on their personal tax returns.

If you applied for an EIN solely for the purpose of collecting and paying taxes, and the rental properties are held in your name(s), you may report the rental activity on your personal tax return.

Most taxpayers report Rental Activity on Schedule E

However, IRS Pub 527 states "If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc.

See this page for more info: IRS Topic 415 - Renting Residential and Vacation Property

If you report this on your personal tax return on Schedule E, TurboTax will help you set up your rental property and enter your rental activity. Pay close attention to the questions in the beginning (for the Property Profile), since you do not rent the property all year.

Schedule E is found under Business >> Rental Properties & Royalties.

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1 Reply
PatriciaV
Level 7

Do we file C or E? We have vacation rental, which is rented part time. We have EIN since we tax the rentals. When receiving the EIN, said to file a 1065 last tax year.

How you report your rental activity depends on several factors.

If you have formed a company to handle the rentals and applied for an EIN, the IRS expects to receive a business tax return (Form 1065) for this company. This is typical for a company owned by more than one person. You may use TurboTax Business to prepare the business tax return.

In this case, all rental activity (income, expenses, and assets for depreciation) is entered and reported on the business tax return. The owners receive Schedule K-1 to enter on their personal tax returns.

If you applied for an EIN solely for the purpose of collecting and paying taxes, and the rental properties are held in your name(s), you may report the rental activity on your personal tax return.

Most taxpayers report Rental Activity on Schedule E

However, IRS Pub 527 states "If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc.

See this page for more info: IRS Topic 415 - Renting Residential and Vacation Property

If you report this on your personal tax return on Schedule E, TurboTax will help you set up your rental property and enter your rental activity. Pay close attention to the questions in the beginning (for the Property Profile), since you do not rent the property all year.

Schedule E is found under Business >> Rental Properties & Royalties.

View solution in original post

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