Situation: I have a small business on the same property as
my residence. (80 acres) The business
is a sole proprietorship , seasonal, and i'm in the business of renting out my barn for weddings, events. We also have some lodging in the lower level of the barn, 1 small cabin, and licensed camping that all goes through the Barn business.
On a separate parcel on this property is a small mortgaged Farm House that has been rented over the years as a
single family dwelling with the last renter moving out 12/31/15. A schedule E and rental certificates have been filed in this manner for the last 20
years. In 2016 and continuing into 2017 we decided
to make the FarmHouse available to our wedding parties. In 2016
I paid quarterly sales tax for all the income it generated because it
was less than a 30 day rental. (note: we do not occupy the property ever - and is not rented every weekend - sat empty all winter)
What is the best way to handle this: report on the Sched E all income generated
from the farm house, showing sales taxes paid, expenses, etc.
or.... if considering this as a “ lodging” part of my wedding business, can the Barn pay monthly
“rent” for using it and all income from its rental would be income for the
Barn business and continue filing the Sched E as in prior years?
Really appreciate the help!!
Kathy
