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It is schedule C since grandmabee said client provides substantial services. Therefore it is subject to SE tax per reg 1.1402(a)-4(c). 27.5 years is for a residential property. In this case, nobody "resides" there as Gail in Virginia pointed out. If you hire somebody to prepare breakfast you are still providing the services, same as changing sheets and daily cleaning. We stayed in an ABnB where there was no food service (there was a well stocked refrigerator and pantry) no daily cleaning or bed changes (which was fine with us). That would be a schedule E activity with 39 year depreciation.

I think that is a regional issue. In CA, the maximum amount of UI you can get per week is $450. And the workers who we furloughed don't get that much, closer to $300 per week. With rent on a 2 bedroom apartment at about $1800 per month, you can see that regular UI is not going to cut it for our workers. The extra $600 will really get them close, but not above, their normal wages in our area. I bet it is much worse for people in the major cities trying to get by on UI only. Tom Modesto, CA

Wasn't taking issue with you per se. It seemed like the tone of the entire thread was "businesses don't need this money", when in fact they do. Maybe I am just sensitive right now, because I see a failure of government at every turn in this crisis. The PPP was a good idea that died on the floor of big government and greedy bankers. And the people who are really suffering are my friends and colleagues at our company. Makes me feel guilty that I am still working when they are not. Tom Modesto, CA

the way to avoid having your rental activity being classified as a bed and breakfast is not to provide substantial services to your guests—don’t provide them breakfasts, clean their rooms each day, or do their laundry. Charge renters a cleaning fee at the end of their visit that is separate from their daily rental charge. https://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-your-home-airbnb-vrbo.html

I see no choice but to file for 2016. It is not worth putting your professional credentials on the line for someone else's irresponsible actions. At least beneficiaries won't be complaining about paying tax at their level.

What entails the breakfast and snacks? Are they produced by the owner or are they acquired from an establishment and just provided? I read a report on these years ago and the determination was that you have to consider whether you are performing ongoing services and how substantial they are compared to inconsequential "services". Schedule C was sort of deemed if you cleaned every day, provided tenants with concierge services or cooked them food. If you gave them baked goods you bought at a store when they checked into the place, cleaned only after they left and just left them a binder of ideas where to eat - schedule E. I think how you advertise would sort of dictate it also. I've stayed in many BnBs and I've stayed in many apartment sharing locales. IMO it's pretty obvious which should go on which form.

I'm also rather disgusted by the $10 BILLION that BoA alone made on the PPP loans they've processed.

@Edsel, please don't confuse funds designated for the SBA's PPP loans with the funds that the CARES Act designated for institutions for higher education. The amounts available to each institution was determined by some formula that Congress came up with and this has nothing to do with the PPP.

There was a 1099-R issued for 2016, with NY as trustee. $80k distribution & 40K income. As far as I know, there hasn't been any CP2000 or any other correspondence from the IRS.

I understand your position Catherine. But the return needs to be filed based on the facts and circumstances regardless of how beneficiaries react to it.

Only in trying to understand it all NOW. It's a big, complex program, with little gotchas and glitches scattered throughout. I am hoping that by next year's filing season they have the basic issues worked out. Until then, Magic 8-Ball keeps saying, "Answer hazy; Ask again later!"

Sch C, choose nonresidential property in fixed assets. Just like our home offices are nonresidential property.

I would be inclined to agree that it is non-residential property because of the transient nature of the tenants. None of the tenants will be using it as a residence. It is closer to a hotel than an apartment building. That said, I have no idea why ATX doesn't want to let you use it as 39 year property.

I disagree with the sentiment above. The company I work for is completely shut down except for accounting and Management (lucky me, only a 10% pay cut...so far). We furloughed 165 employees. Revenue is zero. But we still have to pay our leases for the building. We still have alarm systems, water bills, and the benefits for our employees. These obligations need to be paid. The owners have stopped taking draws, and are putting money into the company to keep it afloat. How are they supposed to pay their bills with no income from the company? And there are hundreds or thousands of "non-essential" companies like us who are in this same boat. If we stop paying our lease, how is the landlord going to pay their bills? While our employees are on UI, they are still not getting the enhanced amount. The Governor of CA threw 3 million people out of work, and was shocked when they all filed for unemployment? The CA EDD cannot keep up. The system requires that the employer verify the wages of the worker, but the businesses are shut down or working with less staff. A PPP loan would be awesome for us. We had great credit, until our revenues went to nothing. Who would loan to a company without revenue? And when this opens up, my projection for the company is at best break even for the year. Who is going to loan money to a company that is struggling? That is not how banking works. How are we going to get the funds for our planned expansion? We had projected to add over 100 jobs later this year when we built and opened our third facility, but that may not happen now, or may be delayed while we build back our profits and credit worthiness. Please tell the children of our hard working employees that they can't live the life their parents want to give them because they are "non-essential". Sorry if this is offensive, but there is a different side to this story. We cannot get a PPP loan, so our employees sit at home and our company withers on the vine. Not looking for sympathy, just explaining that there were good reasons for the PPP loan program. I just hope the scammers and leaches of the country don't get all the money instead of the companies who provide good jobs and benefits. JMHO. Tom Modesto, CA

I'd love for Drake to make some changes to their reports. Font size is certainly one! Customization is another; I've managed to wrangle some specialized reports, and tried to save/memorize them, but durned if I can *ever* find them again later. Grrr!