Hi all! Two (hopefully quick) questions.
I own a rental home that I rent out to friends slightly above cost. The likely hood that I will turn a profit on it is low. Could this be reclassified as a hobby?
In that same vein, I have had several corporate contractors in. For example, I had to fix a pipe issue and hired a plumbing Corp. Will the receipt provided by that company be sufficient for a deduction?
Posted by hopbow
2 Comments
There are no Schedule E deductions when you are not renting out a home at market rates. So no deduction for repairs. This would be treated as a second personal home, where you call deduct interest and property taxes on your schedule A.
If you are choosing to rent it below market rate, you skip Schedule E (rental income & deductions) and instead use Schedule 1 to report the income (no deductions).