How do I report below market rents that is recorded on a 1099-MISC?

[ILoveMyCat]

I have rented a portion of my house long term for a portion of the year for a below market value rate to my church.  I have received a 1099-MISC for the rents I received for the year and am unclear how to report it.

When I report my 1099-MISC form, TurboTax offers 4 choices of where I want this income reported: Schedule E Real Estate Income, Schedule C Business Rental of Personal Property/Equipment, Farm Rental Income, or Nonbusiness Rental of Personal Property/Equipment.  I am guessing I choose the last option (the nonbusiness one since below market rent is not reported on any Schedule)?

As I understand it, you are normally supposed to report below market rents  on Form 1040, line 21 (on TurboTax, Less Common Income -> Miscellaneous Income, 1099-A, 1099-C -> Other Reportable Income).  However, when I attempt to report my 1099-MISC income this way, TurboTax states in bold print, "Do enter income reported on Form 1099-MISC."  So, I don't know how to report it then.

Would appreciate any help!  🙂

[Coleen3 · Accepted solution]

Enter the income on Line 21.(*Line 21 was Other Income. That line changes numbers in 2018 and 2019.) You have no choice. As an explanation, say 1099-Misc Not for Profit.

The message is a caution to people unfamiliar with tax law. You however, understand what is happening. Since it is a Not-for-Profit Rental, you can't claim expenses, as of 2018.

[ILoveMyCat]

Thank you so much!  Just to be sure, does this mean I do not enter the 1099-MISC form information at all into TurboTax where it asks for it (in "1099-MISC and Other Common Income")?  The program does not seem to understand that the same income is entered on 1040 line 21 when I report it there (my income is suddenly incorrectly bigger), so I am guessing that I don't enter the 1099-MISC form information into TurboTax in this instance.

[Coleen3]

Only enter it once.
1. Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer).
2. Click on Federal Taxes at the top of the screen.
3. At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;
4. Scroll down the page to the last section titled: Less common Income and click show more;
5. Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
6. Scroll down to the last option titled Other reportable income and select start or edit;
7. When it asks, "Any other reportable income?" say yes then type in a description and the amount to report it on your tax return.
This will place it on line 21 of your Form 1040