Property Mgmt Office

[newtaxlady]

I am working on a tax return for an individual that owns and rents a couple of commercial properties for 2023.  He used to own 3, but sold one in 2022 and retained a portion of the property with a workshop and small office.  He wants to use this as his "property management" office for the remaining 2 properties.  Apparently, he does all repairs and maintenance himself.  Do I just take the expenses associated with this office and add half to each remaining rental?  Or, do I create a Sched C for property mgmt and carry the expenses there?  My concern is there is not any income on the Sched C.  

[M-MTax · Accepted solution]

The office expense can't be entered on Sch C unless it's an active business which is usually not the case with managing your own rental property.......that generates passive income.