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Should rental income be reflected as self employment income?

 
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3 Replies
Carl
Level 15

Should rental income be reflected as self employment income?

No. Rental income is passive income. That's why it gets reported on SCH E. Self-employment income is income you earn by "doing something" on a recurring basis to actually earn it. With rental income, all you do is "sit there" and collect it on a periodic bases (usually monthly).

Anonymous
Not applicable

Should rental income be reflected as self employment income?

there is an exception.  most  people that have rental income get it from  real property rental which is not subject to self-employment tax.   however, people who rent personal property such as cars, furniture, etc file schedule C and are subject to S E tax.  also people who run B &B's may be subject to it

Should rental income be reflected as self employment income?

@john-dolan needs to respond and provide more details. 

 

Another potential for error is when a lessee (or property manager) issues a 1099-MISC to the owner/lessor for rent but instead of entering the figure in Box 1, the figure is entered in Box 7. I have actually had this happen to me, personally, as well as a couple of clients in the past. The resolution is to get the payer to issue a corrected 1099-MISC.

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