Should I report the money I receive as use of a building on my property as rent or misc income? I get a 1099MISC from the person who rents it, as he uses it for business.

[rachelweeden]

The amount will be less than $5,000. The space is an outbuilding and is used for storage, not living space.

[Carl]

What the property/building is used for doesn't matter. You own it, and someone else pays you so that someone else can use it. What they pay you is rent, any way you look at it. The income gets reported on SCH E as a part of your personal tax return.

You "WILL" have more questions if you've never dealt with rental property before. Feel free to ask them here. While I already know what a majority of your questions will be, I'll wait for you to ask them. Otherwise, the "information overload" all in one shot has the tendency to overwhelm a first time landlord.

[rachelweeden]

Thanks! I currently manage another rental property, so am pretty familiar with SCH E and filing for that, etc. This one just gave me pause to think, as I received the 1099MISC. Thank you for clarifying! I'd be happy to hear any other info/advice you have on filing for rental properties, I'm sure I could always learn more! Thanks.

[Carl]

Well, there are several things that will matter for this specific rental so that you make the correct selections in the program. For example, is the building being rented out have any utilities in it? (electric, water, cable, etc.) If so, are those utilities billed separately from your main residence on that same property?
What about the property taxes? Is that building or floor space included on your property tax bill, and is it a part of the designated "heated/cooled" space you are taxed on by your county? (What state by the way?)
Depending, you "might" be reporting that you rent out a part of your primary residence, and that will affect your depreciation amount, deductible rental expenses, and the such. Or do you already know how to deal with that maybe?

[rachelweeden]

This is in PA. The building has electricity and is billed separately from the main residence. The structure is not heated/cooled, but the structure is noted on our county tax bill. So no - I don't believe this is a rental of our primary residence.

[Carl]

If the structure is taxed separately for property taxes and billed separately for utilities, then you're right. It's A completely separately rental.
If purchased on the same closing statement as your primary residence, then you'll have to allocate both land and structure values to the building and the property it sits on. But that shouldn't be a big deal to do anyway.