IRS generating a 1099 for rentals

[Cyrus24]

I haven't used Deluxe for a few years because of an LLC, but a Google search indicated that Schedule C and 1099K was supported in Deluxe. I found this about it. It doesn't seem that there is a specific area for the 1099K, but it can be entered as income on the schedule C. It does seem that the 1099K is specifically supported in Home & Business, but not really required.

Re: How do I add 1099k

You can enter the income reported on your Form 1099-K as self-employment income on Schedule C. Please follow these steps in TurboTax: Open or continue your return. Search for Sch C and select the Jump to link in the search results. Next: If you’re entering info about your business for the...

ttlc.intuit.com

I’ll try that route next time I get into TT.

For the CPA enthusiasts, I do have a CPA do the return for a family trust I manage. Were it not for the extra oversight he provides, I believe I could do the return.

 

[DRH90277]

I struggle with the expense side of timeshare rental reporting, particularly as it relates to depreciation. For example, we may have an occasional rental and not always the same timeshare. To report it properly, the timeshare asset should be set up for depreciation. And, by the way, the asset value recorded for depreciation purposes should be the market value (not the purchase price). The depreciation is then calculated by Turbo Tax each year regardless of whether it is rented or not for each of the recorded timeshares. So, compliance becomes a problem as I don't see a good way to turn the depreciation on or off for various timeshares. Of course, we all want to comply with appropriate tax reporting. There must be a simple solution.

From my perspective, It may be easier to just eat the depreciation and let that expense go unreported?

Has anyone ever found an authoritative approach to the proper reporting of an occasional timeshare rental? To me, this is somewhat like renting out the family pony for a birthday party - if it's more than $600 and the pony just eats the lawn.

 

[VacationForever]

I struggle with the expense side of timeshare rental reporting, particularly as it relates to depreciation. For example, we may have an occasional rental and not always the same timeshare. To report it properly, the timeshare asset should be set up for depreciation. And, by the way, the asset value recorded for depreciation purposes should be the market value (not the purchase price). The depreciation is then calculated by Turbo Tax each year regardless of whether it is rented or not for each of the recorded timeshares. So, compliance becomes a problem as I don't see a good way to turn the depreciation on or off for various timeshares. Of course, we all want to comply with appropriate tax reporting. There must be a simple solution.

From my perspective, It may be easier to just eat the depreciation and let that expense go unreported?

Has anyone ever found an authoritative approach to the proper reporting of an occasional timeshare rental? To me, this is somewhat like renting out the family pony for a birthday party - if it's more than $600 and the pony just eats the lawn.

I am in the same boat. I do occasional rentals and at times rentals cover MF plus a little more and other times at a loss, I just let it go unreported. If I add in depreciation, I would be getting more back while filing taxes than paying for taxes on the income.

 

[dioxide45]

Depreciation would probably only apply if you were using the timeshare week 100% for rental purposes every year.

 

[Eric B]

Depreciation would probably only apply if you were using the timeshare week 100% for rental purposes every year.

I'm not sure that's actually true or all that well documented anywhere. For ordinary rental properties like homes, you can depreciate them even if you use them yourself for part of the year. That's getting a bit into the depths of tax planning, though - there are somethings that get paid for with annual fees that really should be capital costs that get depreciated to (e.g., new roofs and appliances) but I would give you pretty good odds that even the most fastidious folks don't go to that level of compliance even if they are using CPAs.

 

[cbyrne1174]

I think I'm just going to try to report on schedule C of my 1040 that my deduction is exactly equal to my income from the 1099k reported transactions so the net income (profit) is 0 and just use a portion of my maintenance fees as the deduction. I only ever rent out $3k tops and my MF are $4.5k. With housekeeping credits, reservation transactions, purchase price, etc you can't really assign an exact dollar value anyways. The system wasn't designed that way. It also says on the form that if you report a loss on schedule C that you have to include that on your regular 1040. So hopefully it works out.

 

[dioxide45]

I think I'm just going to try to report on schedule C of my 1040 that my deduction is exactly equal to my income from the 1099k reported transactions so the net income (profit) is 0 and just use a portion of my maintenance fees as the deduction. I only ever rent out $3k tops and my MF are $4.5k. With housekeeping credits, reservation transactions, purchase price, etc you can't really assign an exact dollar value anyways. The system wasn't designed that way. It also says on the form that if you report a loss on schedule C that you have to include that on your regular 1040. So hopefully it works out.

I would think just determining your MF per point (blended/average) and then multiplying that by the number of points for the reservation that you rented would be your write off amount.

 

[T_R_Oglodyte]

It's also not entirely clear how to write off the initial cost of the ownership because it's not well addressed in the tax regulations.

You have to determine if the ownership is personal property. (It most likely is, under IRS rules regarding rentals of second homes.) Depreciation of personal property is almost never allowed under IRS rules.

As noted above, you would report this income on a schedule C.

 

[cbyrne1174]

I would think just determining your MF per point (blended/average) and then multiplying that by the number of points for the reservation that you rented would be your write off amount.

Yea but each reservation also uses a $124 guest certificate, $19 reservation fee and $159 housekeeping credit. Wyndham isn't the same as Marriott.

 

[dioxide45]

Yea but each reservation also uses a $124 guest certificate, $19 reservation fee and $159 housekeeping credit. Wyndham isn't the same as Marriott.

True. And if you pay actual "cash" for those when you make the reservation that you rent, then you should also be able to write those off in addition to the MF per point. If you don't pay the HK fee, then that HK is included in the MFs.

 

[rapmarks]

Prior to renting out my timeshare, I started renting a rental property. I discovered you can’t get a deduction for a loss if your income is above a certain point, and it is not your main source of income.

 

[dioxide45]

Prior to renting out my timeshare, I started renting a rental property. I discovered you can’t get a deduction for a loss if your income is above a certain point, and it is not your main source of income.

If it is some kind of side hustle, it is probably not a good idea to take a loss on the business. So if you are renting your one timeshare week now and then, you should show some kind of profit or $0 profit.

 

[VacationForever]

Prior to renting out my timeshare, I started renting a rental property. I discovered you can’t get a deduction for a loss if your income is above a certain point, and it is not your main source of income.

It happened to me when my CPA did my taxes on my rental home. I ran at a loss for many years and he told me that "too bad, you made too much" and no deduction. I have no interest in ever having rental homes again.

 

[rapmarks]

It happened to me when my CPA did my taxes on my rental home. I ran at a loss for many years and he told me that "too bad, you made too much" and no deduction. I have no interest in ever having rental homes again.

Me either. My daughter lives in ours so I can’t evict my grandsons

 

[Eric B]

It happened to me when my CPA did my taxes on my rental home. I ran at a loss for many years and he told me that "too bad, you made too much" and no deduction. I have no interest in ever having rental homes again.

I feel your pain, but have been happy renting at a profit for a few decades. I can’t take a deduction either, but am okay with it.