Rents received as payment for use of real estate in which personal services are
ID: 2593953 • Letter: R
Question
Rents received as payment for use of real estate in which personal services are provided as an incidental part of a real estate dealers business are: Farm income, reported on Schedule F; not- for profit income reported on form 1040, line 21; investment income reported on schedule E; business earned income, reported on Schedule C. Rents received as payment for use of real estate in which personal services are provided as an incidental part of a real estate dealers business are: Farm income, reported on Schedule F; not- for profit income reported on form 1040, line 21; investment income reported on schedule E; business earned income, reported on Schedule C.Explanation / Answer
If you were a real estate dealer, include only the rent received from real estate (including personal property leased with this real estate) you held for the primary purpose of renting to produce income. Do not use Schedule E to report income and expenses from rentals of real estate you held for sale to customers in the ordinary course of your business as a real estate dealer. Instead, use Schedule C or C-EZ for those rentals
-Rental income from farm production or crop shares. Report farm rental income and expenses on Form 4835 if: You are an individual, You received rental income based on crops or livestock produced by the tenant, and You did not materially participate in the management or operation of the farm
-If the recipient was not a financial institution or you did not receive a Form 1098 from the recipient, report your deductible mortgage interest on line 13.
-If you are the holder of a residual interest in a REMIC, use Part IV to report your total share of the REMIC's taxable income or loss for each quarter included in your tax year. You should receive Schedule Q (Form 1066) and instructions from the REMIC for each quarter. Do not attach Schedule(s) Q to your return. Keep them for your records
If your rental of personal property is not a business, see the instructions for Form 1040, lines 21 and 36, to find out how to report the income and expenses.