Trnr395 Posted March 13, 2012 Report Share Posted March 13, 2012 My clients just built two small camps that are used just for renting out to hunters, sledders, etc. Should this be reported on Schedule E or C. Quote Link to comment Share on other sites More sharing options...
JanMi Posted March 13, 2012 Report Share Posted March 13, 2012 It depends, do they have a business name? Is it just one person? It kinda sounds to me it would be a rental. Quote Link to comment Share on other sites More sharing options...
Trnr395 Posted March 13, 2012 Author Report Share Posted March 13, 2012 They have a business name and it is husband and wife running the business Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 13, 2012 Report Share Posted March 13, 2012 Do they provide services to the renters? Do they rent with annual leases or for short-term? How short? Quote Link to comment Share on other sites More sharing options...
Trnr395 Posted March 13, 2012 Author Report Share Posted March 13, 2012 They rent for a week, or a weekend typically. They provide services as far as chopping wood for their fires, laundry and all utilities. Quote Link to comment Share on other sites More sharing options...
jainen Posted March 13, 2012 Report Share Posted March 13, 2012 >>rent for a week, or a weekend<< According to Reg 1.469-1T(e)(3), this is not a "rental activity" because the average period of use is less than seven days. Therefore, it does not go on Schedule E; it is treated as a trade or business on Schedule C (assuming it is not a hobby). However, it is still a passive activity unless the owners had material participation. That's a higher standard than active participation, probably more than chopping wood and washing up. Do they handle their own bookings, or use an agent? Quote Link to comment Share on other sites More sharing options...
Trnr395 Posted March 13, 2012 Author Report Share Posted March 13, 2012 That was the direction I was leaning Jainen, and they handle every aspect of the business from bookings, office work. Know another question is the cost of the camps incurred last year, can I depreciate the cost of building them as business start up or does it have to be real property and expensed over 39 years? Quote Link to comment Share on other sites More sharing options...
jainen Posted March 13, 2012 Report Share Posted March 13, 2012 >>the cost of building them<< Unfortunately, you already know the answer to that. The best I can do is remind you that if the clients can identify furnishings and appliances separate from the building itself, that might be depreciated or deducted faster. Also, fences and other land improvements may be 15 year property. Quote Link to comment Share on other sites More sharing options...
Trnr395 Posted March 13, 2012 Author Report Share Posted March 13, 2012 ya ya i thought so....39 years it is..... Quote Link to comment Share on other sites More sharing options...
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