Tax Help PLEASE! How do I file income on rental property for property I don't own?

[kjlpc]

I am a self-employed psychotherapist.  I lease a suite of offices from a property owner.  I lease each office out to another practitioner.  I make a small amount of money from doing this. I can't find a place to put this on my taxes.  If I put it in Rentals and Royalties and state that I own 0% of the property the income does not seem to show up as taxable income...which is GREAT if I don't have to actually pay taxes on that income but somehow I doubt that is the case.  Anyone, anyone??

[DavidD66]

I would include in your business income as a psychotherapist.  Alternatively, you net your business rent so that you are only reporting the net amount of rent you pay.  

[kjlpc]

Thank you so much for the response! Very helpful. My only concern is if it went under rental income (which is what it is) I wouldn’t be charged the extra 7% self-employment tax on it. Does this thought change your answer??

[Mike DiFonzo]

Schedule E.  Commercial Property.  Attribute all expenses attributable to the rental such as rent you are paying on that portion of the space.  Ownership percentage is  unnecessary as this is used just for splitting of expenses.  This will fall outside the self employment tax.