RV rental - Sch E or C

Forum|Forum|4 years ago
June 9, 2022
3 replies
19 views

My client decided to buy an RV in 2021 and rent it out w/o any personal usage. He rented it out 88 days, no more than 7 days as a time, provided no substantial services other than delivering and setting up onsite/picking up & breaking down, if within a 200 mile radius of his home, and cleanings in between rentals. I am leaning towards a schedule E. On the other hand it is a rental of personal property and as such, should be on sch C? If the former, I think I can only take bonus (not section) 179 depreciation on entire cost of RV? There is a lot of different views out there!

Lacerte Tax

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IRonMaN

Level 15

I think you might want to lean the other direction. Since the renters appear to be driving it around as part of the renting deal, you are renting a vehicle and not real estate. That makes me lean the opposite direction over to schedule C.

Slava Ukraini!

qbteachmt

Level 15

"no substantial services other than delivering and setting up onsite/picking up & breaking down, if within a 200 mile radius of his home, and cleanings in between rentals."

Uh, other than that, what would be left? Tour guide and chauffeur?

You want this Pub:

https://www.irs.gov/pub/irs-pdf/p925.pdf

Don't yell at us; we're volunteers

1

11BusterAuthor

Level 5

I do not believe this is a question of being a passive activity or not....this would be more of whether considered a business or not. As IRonMan points out, this becomes more of a business of renting out personal property, whether its the RV itself and/or the truck used to set up/breakdown, when delivery is requested vs. pickup at client's premises. Thank-you for both responses. But I think I am correct. esp if reported on a sch C, I can take either 179 or bonus.

1

11BusterAuthor

Level 5

Have had another response from a person on my tax education provider webpost here in SoCal who insists it should be reported on both lines 8 and 24a of 1040 - schedule 1.

T

TaxGuyBill

Level 15

@11Buster wrote:

My client decided to buy an RV in 2021 and rent it out w/o any personal usage. He rented it out 88 days, no more than 7 days as a time,

To me, the regularity of the rental likely makes it a business, which would put it on Schedule C.

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