Question

Rental Property

Forum|Forum|5 years ago
February 25, 2021
2 replies
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I have a Retail store (LLC) on my property that I charge rent to for the building and then claim the rent on my personal taxes under Schedule E. Is that considered self-rental subject to recharacterization rules? And if I have a profit on that rental is that considered non passive income?

Carl11_2

Employee

I have a Retail store (LLC) on my property that I charge rent to for the building

Do you own the entity that pays the rent? If so, what kind of entity is it? Sole proprietorship? single member LLC? multi-member LLC? Partnership? S-Corp? C-Corp? Something else maybe?

Is "my property" your personal residence? Or is it commercial property that you own?

Basically, all income from all sources reported on SCH E is passive income. Period. But depending on your specific and explicit situation, SCH E may not be the right place to report the income.

L

Looney1966Author

I have a Retail store (LLC) on my property that I charge rent to for the building

Do you own the entity that pays the rent? YES I OWN AND IT IS ON MY PROPERTY - I HAVE A RETAIL STORE IN THE BUILDING - SINGLE MEMBER LLC.

If so, what kind of entity is it? Sole proprietorship? single member LLC? multi-member LLC? Partnership? S-Corp? C-Corp? Something else maybe? - SINGLE MEMBER LLC - SOON TO BE PARTNERSHIP

Is "my property" your personal residence? Or is it commercial property that you own? IT IS A BUILDING ON MY PERSONAL PROPERTY THAT I HAVE HAD A BUSINESS ON FOR 10 YEARS.

Basically, all income from all sources reported on SCH E is passive income. Period. But depending on your specific and explicit situation, SCH E may not be the right place to report the income. I WAS READING THAT IT IS UNDER SCHEDULE E BUT IT IS CONSIDERED SELF-RENTAL AND SUBJECT TO RECHARACTERIZATION RULES?