Discussion:Farm with Residential rental income
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Discussion Forum Index --> Advanced Tax Questions --> Farm with Residential rental income
Discussion Forum Index --> Tax Questions --> Farm with Residential rental income
| 6 September 2008 | |
| So, this has got to be a fairly common scenario:
Client (Sch F farm) purchases 45 acres in 2008. Acreage includes pole barn used for farm. Inside the pole barn is a 2400 sq ft residence. Client rents the residence. Only reason for receiving rental income is because the property is farm. Is the rental income Sch F or Sch E? | |
| 7 September 2008 | |
| I'd say the rental income from the residence is Sch E income. The depreciation for the residence needs to be allocated between barn and residence. Any interest expense and/or repairs would likewist need to be allocated betwee Sch E and Sch F. As you say this is not all that uncommon. Generally it's just an old farmhouse on the acreage instead of a house and barn combination. | |
ReadMyLips (talk|edits) said: | 7 September 2008 |
| I agree-Schedule E. This may also be to your client's advantage as the rental income would not be subject to s/e. | |
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