topic Should rental income be reflected as self employment income? in Investors & landlords

Should rental income be reflected as self employment income?

john-dolan — Sat, 07 Sep 2019 17:41:13 GMT

Re: Should rental income be reflected as self employment income?

Carl — Sat, 07 Sep 2019 17:53:31 GMT

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).

Re: Should rental income be reflected as self employment income?

Anonymous — Sat, 07 Sep 2019 19:55:35 GMT

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

Re: Should rental income be reflected as self employment income?

Anonymous_ — Sat, 07 Sep 2019 20:08:01 GMT

@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.