What kind of boat is it?
The test the IRS applies is simply that the property has to have have all three:
If so, it can be treated as a rental property, reported on Schedule E.
If not, say its a bass/fishing boat, then it is reported on a Schedule C.
Hello and thanks for your reply...Its a recreational boat that I rent out from time to time ( about 4 hrs per customer/transaction)..So it looks like a schedule C. Now, I also had repairs and maintenance expenses on the boat as well as travel miles (about 1,000) on the vehicle I used to tow/deliver the boat to the lake. On top, I also had a major transmission repair on the same vehicle..Do you mind telling me what is eligible to be claimed as deduction out of these items and where should I input them in Turbotax?. Finally can I depreciate the boat and to reduce the taxable income? Same question, Where should I input/calculate that in turbotax? These are probably the last questions I have...Thanks in advance and look forward to getting your comments ..
You can deduct the expenses you mention but only to the extent you use the boat for business purposes. So, if you use it 50% of the time for rental to customers and 50% for personal use, you can deduct half of all the expenses you have. Any expense that is exclusively for the business you can deduct 100%. For the auto, you will list it as a business vehicle and report the personal versus business mileage to allocate the cost of operating it to the business.
You would enter the business receipts and expenses in the Your income and expense section of TurboTax, and then Self-employment income and expenses:
For the type of income to enter, choose Other self-employed income:
Choose the Vehicle expense option so you can enter you vehicle expenses:
Choose the Less Common expenses option to find the Assets entry box to enter the boat and major equipment for depreciation: