If you are a U.S. citizen or resident alien, you are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code.
The IRS makes a distinction between being in the business of renting personal property and income earned when you are not in the business of renting personal property. This IRS website states:
- Report income and expenses related to personal property rentals on IRS Schedule C Self-Employment income and Expenses, if you are in the business of renting personal property.
- Report income on line 8l and expenses on line 24b of IRS Schedule 1 Form 1040, if you are not in the business of renting personal property.
In TurboTax Online, report Schedule C income by following these steps:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Scroll down to Self-employment income and expenses and click on the dropdown menu.
- Click Start/Revisit to the right of Self-employment income and expenses.
In TurboTax Online, report casual rental of personal property by following these steps:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Scroll down to Less Common Income and click on the dropdown menu.
- Click Start/Revisit to the right of Miscellaneous Income, 1099-A, 1099-C.
- Click Start/Revisit to the right of Income from renting out personal property (not rental real estate or farm rental).
- You are able to report both rental income and rental expense which are reported on IRS Schedule 1.
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