I am renting out my recreational vehicle for more than 15 days per year. I cannot determine if this is a Schedule C or a Schedule E. Does the IRS consider this rental real estate? It has kitchen, full bath, and sleeping facilities, and a motor. In other words it is not a trailer. Any advice on Sch E or Sch C is appreciated.
Thanks
If you rent it to tenants, you would treat it as a rental and report it on a Form Schedule E. Per IRS, it is depreciated over five years.
You could deduct any other rental expenses that you pay for the RV, such as mortgage interest, insurance, repairs and any utilities. To report a rental, you would need to upgrade to TurboTax Premier edition.
Please feel free to post any additional details or questions in the comment section.
Thanks Michael, Since it is not real property, I am confused as to why I would use Schedule E rather than Schedule C. Is it deemed to be real property since it meets the cooking, sleeping, and bathroom requirements?
It's not real property which is why we're not depreciating it over 27.5 years for residential real property. The IRS allows a 5-year depreciation term on the RV.
IRS Publication 527 - Residential Rental Property helps clear things up. Chapter 5 of Pub 527 - Personal Use of Dwelling Unit spells it out for us.
Dwelling unit. A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. It also includes all structures or other property belonging to the dwelling unit. A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities.
Regarding Schedule C versus Schedule E:
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."
This is interpreted as running a hotel-like business, with tenant services. If you rent a furnished condo (with kitchen items and linen, for instance), you are not necessarily running a hotel. But if you change the linen and/or provide maid services during the tenant's stay, then this could be considered running a hotel, and the activity should be reported on Schedule C.