Discussion:Report on C or E?

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Discussion Forum Index --> Basic Tax Questions --> Report on C or E?


Discussion Forum Index --> Tax Questions --> Report on C or E?

Anchorman (talk|edits) said:

2 April 2014
Single Member LLC buys and flips properties. All sales and costs of sales reported on Schedule C. Super simple, until now: they bought one, rehabbed, and are renting it! Where does the rental income go on the 1040...to Schedule C along with the flips, or to Schedule E ?? (Property is titled in name of SMLLC). Thanks

JR1 (talk|edits) said:

April 2, 2014
Sch. E when it goes to rental.

Anchorman (talk|edits) said:

2 April 2014
Fabulous. Thanks JR

Terry Oraha (talk|edits) said:

2 April 2014
Question: did the entity intend to buy this in order to rent it; or was it taken from inventory and rented. Does intent matter? Is it still for sale?

JR1 (talk|edits) said:

April 2, 2014
Intent doesn't matter...for something super short term, most of us would just Sch. C it, but when you can't sell and enter into a lease, time to move it from inventory to fixed asset, depreciate it, and report as rental.

Ckenefick (talk|edits) said:

2 April 2014
Real estate dealers might have a Schedule C obligation. However, dealers can also hold property for investment. And all of this is pretty much what JR1 is saying.

See -4 of 1402(a).

Harry Boscoe (talk|edits) said:

2 April 2014
Can we possibly answer this question completely, without at least brushing up against the definition of "dealer" as it relates to real estate, and "trade or business" when the activity of the trade or business includes being a landlord? "I'm just asking," as some have started to say.

Kevinh5 (talk|edits) said:

2 April 2014
I do think that it matters whether it is still for sale, as Terry writes. Rental of 'inventory' goes on the Sch C.
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