I have rental income from subleasing property that I lease ( and therefore do not own). Do I claim this money in the Rental Income or Misc Income section?

Yes, you treat this as rental income on Schedule E.

Rent you receive from your tenant under the sublease is rental income and must be reported. If your tenant pays for expenses that you are obligated to pay pursuant to your lease, then you must treat the tenant's payment as income. You can deduct expenses related to the sublease to offset rental income. You can deduct the rent you pay to your landlord because it is an ordinary and necessary expense for you to rent the property. You can also deduct operating expenses, such as property maintenance you pay. Expenses related to damage caused by your tenant are also deductible. Receiving rental income requires you to report your income and expense using form 1040. You will generally use Schedule E of form 1040 to report your rental income and expenses. If you are in the business of renting property or investing in real estate, you'll also fill out Schedule C relating to profits or losses from a business. You may have to fill out state specific forms related to your rental properties.

I just ran into the same problem in Turbo Tax H&B 2014 and am still pretty confused about how to proceed.  I have a 10-year lease on an office building out of which I have run a small law practice for the last several years. In January of 2014 I decided to SUBLET a couple of my extra offices to another attorney as I had plenty of space.  Neither of us are in the real estate business.  I realize that I need to claim the income on Schedule E, but Turbo Tax 2014 does not seem to offer a choice for this type of situation.  In that case should I answer the question as if I am the 100% owner of the building?  I think that was what the original question was.  Additionally, re: the rent that I myself pay to the landlord, the building utilities, etc - prior to 2014, I was able to fully deduct those expenses on my Schedule C already... as I had the building to myself.  Can I just continue to do THAT, or do I have to try to split them among the two income sources now? Any guidance would be greatly appreciated!  Thank you

The rent that you pay your landlord and utilities should be split between Schedule C and Schedule E.  You can't use it all as a business deduction on Schedule C if that space is not being used for your business.

I'm not sure what TurboTax does with the 100% question, but I would say you own 100% of the building and manually calculate the rental portion of the rent and utilities.  You may be able to enter just the rental percentage and enter the FULL amount of utilities and rent, but I'm not 100% positive.  Make sure you do NOT claim depreciation on the building.

Can Tenant request Schedule E from landlord?

Not really.  A tenant has no right to see the landlord's tax return.

Can I request evidence from my landlord to show that rental income tax was properly paid?

She is doing wired things and i thought it was for tax purpose and she is trying to hide her rental income.

Again, you have no right to see your landlord's tax return.

Out of curiosity, why are you concerned about it?  Even if she is hiding her rental income, does it directly affect you in any way?

Ever find out an answer? I sublease part of the building I rent, but I don't own the building. Seems the only option they give you is if you are a building owner.

But in the turbo tax q&a, it specifies this exact situation and says to file in scheduleE, but schedule E doesn't have the option

Matthewkelley12, yes! I spoke to a turbo tax cpa last year and they said that i should enter myself and my husband as the owner of the property.

Here's another spot where the interview could "guide" you better.  You'll notice that the actual question on the page is "Does All the Income you Received From {Name} Belong to You?" but then conflates that with ownership of the property.  Obviously the answer to the actual question is "Yes."

After telling TT what kind of property you're renting (Commercial) you'll eventually come to a page where  TT asks about how you acquired the property.  Indicate "None of the above."  Just click on "Continue" on the "Gather Depreciation Information" page then work through the "Rental Income" and "Expenses" interviews.  In the latter you will have to allocate between Schedule C and Schedule E.  Keep clicking through until you come to the free-form "Any Other Expenses" page, where you'll put in "Rent" and the appropriate amount.

Tom Young

Tom Young, is there an easier way to navigate to that page?

What if the sublet income us less than the rent paid to the landlord? That means, I would have a rental loss. Since this is a passive activity, is that loss deductible? 

You should claim your rent as "Other income."   According the IRS, "If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year."

NOTE:  . If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit.

You can enter your rent and also the repairs as Miscellaneous Income.  Please follow these steps:

1. Click on Federal > Wages & Income [In TT Self-Employed:  Personal > Personal Income > I'll choose what I work on].
2. Under Less Common Income, click on the box next to Miscellaneous Income, 1099-A, 1099-C
3. On the next screen click on the box next to Other reportable income.  
4. Answer Yes to Any Other Taxable Income?
5. Follow the instructions on the screens.
6. Once you have entered the rental income, you will be brought to the Other Miscellaneous Income Summary.
7. Click Add Another Income Item.  
8. On the Other Taxable Income screen, enter the repairs as a negative number.  Remember, your repairs cannot exceed he amount of rent you collected.

For more information, please see IRS Publication 527 -  Residential Rental Property

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