Schedule E's are for Rental Income (passive), while Schedule C's are for business income (non-passive).
Generally speaking, Rental Income is passive. Passive income can include rent collection, dividends, interest, in other words, income you get but don't work for to get.
Non-passive income is income like your salary or in exchange for services or commission.
For rental property to be non-passive you usually need to be a real estate professional (REPS status) and participate in the day-to-day operations of your rental business.
Bed and Breakfast properties can sometimes qualify as Schedule C because there is active work in preparing meals and other services. The main difference here is the fact that you would provide services to the renters.
In general, to qualify as a real estate professional (doesn't mean you have to be a licensed Realtor):
Another thing to mention is that Sch E filers aren't subject to self-employment tax. If you file a Sch C, you will be subject to self-employment tax.
Schedule E's are for Rental Income (passive), while Schedule C's are for business income (non-passive).
Generally speaking, Rental Income is passive. Passive income can include rent collection, dividends, interest, in other words, income you get but don't work for to get.
Non-passive income is income like your salary or in exchange for services or commission.
For rental property to be non-passive you usually need to be a real estate professional (REPS status) and participate in the day-to-day operations of your rental business.
Bed and Breakfast properties can sometimes qualify as Schedule C because there is active work in preparing meals and other services. The main difference here is the fact that you would provide services to the renters.
So, If I start an LLC to maintain rental properties without a real estate license, will that be included in the non-passive? In other words, will a property management LLC be considered for schedule C?
In general, to qualify as a real estate professional (doesn't mean you have to be a licensed Realtor):
Another thing to mention is that Sch E filers aren't subject to self-employment tax. If you file a Sch C, you will be subject to self-employment tax.