We started renting out our RV through RV share. Can I claim this as a business? What paperwork do I need? and what can I write off?

[BIGAl34]

I do have an LLC set up.   Does that change things?

[Vanessa A]

Yes, if you have an LLC partnership set up, this is considered a flow through entity.  You will need to file a 1065 and then send each partner a Schedule- K-1 to report their share of the income and expenses. 

All of the income and expenses would be reported on the 1065 and will flow through to your returns via the K-1.

[BIGAl34]

What if I'm a sole owner LLC and their not partners?  They're just providing their RV for me to rent/manage for them and I'm operating rentals through my LLC much like a consignment.

[Vanessa A]

Then you would use a Schedule C and report only your part of the profit.  There would not be a K-1.

[jzr0011]

How do you select proper 5 year depreciation for an RV for the Schedule E? Mine is going over 27 years like a house.

[DianeW777]

An RV, if it is not attached to the land permanently, is not real estate. Depreciation is based on category selected which determines the useful life or recovery period. You must select the 'Appliances, carpet, furniture'  on the screen 'Tell Us a Little More About Your Rental Asset'.  This category uses a five year recovery period.

@jzr0011

[grlasnier]

Are you also using the RV for personal trips? If so, you will need to determine what percentage of use is devoted to rental versus personal use.  I did it by counting the number of days personal-use against number of days rental.   

Using an accelerated depreciation may come back to bite you when you sell the vehicle.  Depreciation reduces your cost basis, thereby increasing your gain on sale of the RV associated with rental use.  If you are renting it full time, the entire gain could be considered taxable.  I suggest you obtain the advice of tax counsel experienced in this area on the depreciation period to be used.  If you are renting only a few times per year and continuing to use it mostly for personal, 

[jzr0011]

Let me give a little background. I use turbotax premier and for years have used the rental/royalty section in income for rental houses.(schedule e) We acquired a recreational vehicle(motorhome) late last year and rented it 2 times for 3 days. Thats 6 days for a couple hundred dollars total. 

As I go to add this new rental income it is like below.

Income- Rental Properties & Royalties- Add -Add another rental or royalty

- What are you here to report? Rental property (real estate rented to other) or Royalty (oil, gas, minerals, copyrights, patents)

If I go to rental property it is setting up for a property address, and type (single family, commercial, vacation, other, etc).  Even if I select other it'll ask to calculate the cost basis based on the HUD settlement paper work, and set up to depreciate over 27.5 years.

The above doesn't seem accurate for the rv. (self powered drivable dwelling unit with no HUD paperwork)

I've never filled out self employment income on the schedule C because I never had any. If I go this route turbo tax requires me to update to business edition.

Is self employment income the way you describe?(schedule c)

[AnnetteB6]

If you are only renting the RV occasionally and not to make a profit like a business, then enter your income as rental of personal property (not real estate).  It is reported on Schedule 1 Line 8 with the associated expenses reported on Schedule 1 Line 24b.  

This information is entered into TurboTax through the Less Common Income section of your return. 

Go to Less Common Income > Miscellaneous Income, 1099-A, 1099-C, and click Start or Update. 

Then scroll to Income from renting out personal property (not rental real estate or farm rentals) and click Start or Update to enter your information.  

Be aware that you will only be allowed to claim expenses up to the amount of income you have received.  This type of rental cannot generate a loss on your tax return.

@jzr0011

[21skidoo]

I hope this subject isn’t too old to still get an answer.  

We have two rv’s.  One is rented 100% and one is both personal use and rented.  Last year I filed using schedule E and all worked fine.  For this years taxes, because the rv we also use for personal use had some major issues we were only able to rent it once for three days.

TurboTax says because we did not rent it out for 15 days that I cannot use schedule E for income and expenses for this asset but it doesn’t even suggest what I’m supposed to do instead.  Any help would be appreciated.  Mike

[DianeW777]

Yes, help is here.  When a rental is used for both personal and rental use the following will explain the rule.  The best news is that you do not have to report the income.  Because of this, there is no expense to deduct for that RV.

Minimal Rental Use

There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses.

• IRS Topic 415

@21skidoo 

[21skidoo]

Thank you Diane,

I want to clarify.  So last year when I filed the 2021 schedule E, it was considered year one of depreciation on this rv.  Both rv's were set up to have a five year depreciation.  So this year would have been year two of depreciation.  When I file 2023 taxes next year it will be year three of depreciation (of five total).  Does this basically mean that the second year of depreciation will effectively be zero even though I'm not including this rv on my schedule E this year?   Because it was on last year's taxes and not this years, won't that create a flag for the IRS?

[DianeW777]

The RV that was used for both purposes (personal use and rental use) is essential removed from service in 2022 since there is no income to report based on the IRS rules.  You will indicate it was removed for personal use and then enter a date of removal which should be January 1, 2022 (due to no income being reported).  This will still allow a half month of depreciation in 2022.  Retain your records because this will basically drop off for 2023.  Keep all of your documentation from your tax return so that you can place it back in service on the day of rental use in 2023 should you have more days of rental use in 2023. You will retain the prior depreciation expense amount used on the RV to date for future use.  It will either be needed in 2023 for rental activity or it will be needed at the time of sale.

@21skidoo