Is renting a second home a busness?

Forum|Forum|2 years ago
May 21, 2023
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We own a second home purchased about 5 years ago, which we plan to move into in a few years. In the meantime we are renting it out 100% of the time and making improvements and of performing course maintenance. We would like to be making a profit on the place, but almost never do. We do not employ a management firm, and so feel that we are actively engaged. 1) Does it make sense to call this a business? 2) when we hire a business to improve the place or perform maintenance, do we have to mess with form 1099-NEC? For example, in 2022 we paid a business to paint the exterior for about $6000. Thank you for your kind attention. - Paul

TurboTax Home & Biz Windows

Best answer by DoninGA

You are not in the rental business so no need to file a Schedule C.

You are a landlord and report the rental income and expenses on a Schedule E. You do not provide a 1099-NEC to any company that provides a service on the rental. Nor do you need to provide a 1099-NEC to any independent contractor you hire to provide a service on the rental.

See this TurboTax support FAQ for entering rental income and expenses - https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-income-expenses-rental-property/L5swpaUBt_US_en_US

DoninGAAnswer

Employee

You are not in the rental business so no need to file a Schedule C.

linyphia1515Author

Thank you so much. So right now, the income and expenses on this rental home appears under business income and expenses. I think that's the way I've filed since we bought the place. It is not clear to me how to change it to non-business personal investment? Or should I? Am I going to jail?😉 Probably. - Paul