Using a business DBA and Schedule E for rental income/expenses

Forum|Forum|6 years ago
April 11, 2020
5 replies
0 views

Hi, I plan to buy a small rental property in my name. But for the purposes of separating personal and business finances I want to file a DBA to create a business and open a business checking account to collect rent and pay expenses. This seems pretty normal.

I will NOT have a separate EIN for this business. It's a sole proprietorship. I've read enough messages on this forum that tells me I need to use Schedule E. However there's nowhere in Schedule E for me to put the business name. There is a place to put business name in Schedule C, but I should not be using Schedule C for rental properties.

Is this even an issue or am I overthinking about this? Just use Schedule E and put all the income/expenses from the business account into Schedule E as if everything is under my name and SSN?

Thanks.

Not A Product Question

Best answer by AnnetteB6

Since you will not have a separate EIN for your rental business, everything will still be under your Social Security number on your tax return. Just enter the details on Schedule E as you normally would and do not worry that you are operating the rental property under a separate business name and checking account. It is actually very smart to keep the financial aspects separate.

@californai1683

AnnetteB6Answer

@californai1683

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

Anonymous

there is nowhere you can enter business name for rental property.

Carl11_2

Employee

Hmmmmm.

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/re-nope-the-ein-doesn-t-go-anywhere-let-me-save-you-some-t/01/1441831#M49651

https://ttlc.intuit.com/community/business-taxes/discussion/re-turbox-tax-version-for-single-member-llc-filing-federal-form-1120/01/1163692#M39885

Single member LLC, S-Corp and now DBA?

california1683Author

@Carl11_2 would you believe that you convinced me to not use LLC for rental property? Yes, such is the power of a super helpful member on this forum. 😁I read a lot of your messages on this topic and you actually convinced me.

I had a single member LLC for something else and now I think it's just too much trouble. The overhead of those separate tax filings is killing me.

Carl11_2

Employee

@california1683 I'm not trying to convince anyone of anything really. Just trying to educate folks on the absurdness of it. I get the impression that many so-called "experts" (CPAs, tax pros, EA, etc) are trying to talk people into making their taxes more complicated than they need to be. I think they do this for the sole purpose of keeping a client with them so they can make money off that client. I fully understand they are in business to make money. But I also understand that many of them are not in business to save "me" money. The more complicated they can make it seem, the better chance they have of keeping the client's business. That just one aspect of how I see things working in reality. But then, impressions and opinions are like another thing we all have too. 🙂

I've been doing this landlord stuff for close to 30 years now. Been there. Done that. Got the T-Shirt. Over those years I've learned a lot, and a majority of what I learned was in the school of hard knocks.

For some situations, it may make sense to put rentals into a business structure. For example, when you have two or more people who own rental property that are not married to each other, putting it into a partnership makes sense. Why? Because in my breadth of experience I've learned that the one ship practically guaranteed to sink before reaching port, is a Partnership. So with rental property in a partnership, if things fall apart (or I should say "when" things fall apart) specific legal procedures must be followed to dissolve the partnership - and accountability for the business resources is one of those things that must be dealt with on a legal front.

I'm also self-employed as a computer consultant (SCH C business) since 2005. So with the additional knowledge from the SCH C side of the house, I have a direct correlation between the SCH C stuff and the SCH E stuff. Both have their pros and cons when it comes to taxes.

Virajsmom

@Carl11_2 I have a related question for my rental property. I am a single mom working full time. On the side I have rented out my condo (I’m not living there) and I just created a DBA and got an EIN number. I was told creating DBA will let me take deductions like car, computer, gas, maintenance of property etc. I was wondering if I need a business account or get rent paid to DBA for deductions and to look like a legit business? Also should I put this DBA business name in my living trust? Or put my rental condo in the DBA name? Sorry newbie at this - trying to figure best way. Thanks in advance for your help.

Critter-3

Carl will be by to talk to you for sure however I will give you my opinion here ... first you really should be more careful who you get your financial info from as you did not need an EIN or DBA for a rental property at all and there is no place to enter that EIN on the Sch E on your personal return at all. Unless you are in the "Business" of renting properties you only have a passive source of income reported on a Sch E where all the income and expenses are listed. Office in Home expenses are not allowed on passive income and you also do not pay self employment taxes which is better than the Sch C business option.

Also the property doesn't need to be in the DBA/EIN at all and if you have a mortgage on the place I doubt you can retitle it legally without triggering the Payment in Full clause ... check with your bank. And again this is not needed to report a rental on a Sch E.

I highly recommend you either seek local professional assistance to be educated in your situation and/or read up on rentals in the IRS pub 527 : https://www.irs.gov/forms-pubs/about-publication-527

Virajsmom

Thank you! I realized this once I read through the thread. My idea was to deduct expenses using this DBA - but I guess it is not necessary unless I use it for several properties.

Vanessa A

Yes, since he is just DBA, you will include his business income and expenses with your personal return by attaching Schedule C. To do this you will need to use TurboTax Home and Business or TurboTax Self-Employed.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"