Income and Deductions from Swimming Pool Rental

[amorrissen]

Hello,

Last year I rented out my pool on an hourly basis to individuals. All the rentals are managed through an app (Swimply). I'm hoping to confirm my understanding of how to file.

• Does the income go under rental income?
• Can I deduct expenses for repairs to the pool and new equipment such as a new pump?
• Can I deduct expenses for supplies such as pool chemicals and inflatables that the renters use?

Thanks!

[AmyC · Accepted solution]

1. A pool is real property and might go on sch E, depending on the circumstances and services provided. IRS Topic 414 scratches the tip of the iceberg. Running a swimming pool business seems pretty involved. If you provide substantial service,  it can turn into a Sch C. This is a new trend and not clearly defined by the IRS. 

2. Yes, the portion used for the rental business is deductible

3. Yes, the portion used for the rental business is deductible

[amorrissen]

Thanks for the reply, @AmyC.

I've listed it as pure rental income instead of as a business. After reading the topics on rental income vs. qualified businesses, I don't think the income and services provided are substantial enough for a business designation.

[LeticiaF1]

As AmyC mentioned, the portion used for the rental business is deductible.  When you are ready, to enter your rental:

1. Open or continue your return
2. Locate the Search bar in the upper right of your screen. Search for rentals and select the Jump to link at the top of the search results.
3. Answer Yes to the question Did you have any income from rentals or royalties?
4. On the next screen, Let's see if you're a real estate professional, select any options that apply to you.
5. On the screen What are you here to report?, select Rental property and Continue.
   • If you have more than one rental property to report, no problem—just start with one, and we’ll come back to the other one(s) later.
6. On the following screens, we'll ask you to enter all the info we need about your rental property, including a description of the property, your rental income, any expenses and assets, and other less common situations about your rental.
7. When you reach the Here’s your rental property info screen, double-check the info you entered to make sure everything is accurate and that you haven’t left anything out.
8. Once you’ve entered all your info, you’ll be taken to the Your income and expenses screen.
   • If you have more rentals to enter, scroll down to Rental Properties and Royalty Income (Sch E) and select Edit/Add next to this line.
   • On the Your 2023 rentals and royalties summary screen, select Add another rental or royalty.
   • From here, follow these instructions again, starting with Step 5, and repeat until you’ve entered all your rental income.

Note that partial rentals can be complex. You will need to state that you rented out part of the home.  Then, you will need to determine the percentage of the home you rent out based on the area used and the personal and rental use time.   

@amorrissen