Dumb question, but I have to ask.....

[peggysioux]

In determining if taxpayer is required to file a tax return; if taxpayer has rental, do you consider the gross or net income from rental as part of overall income?

[Gene V]

I use the definition for Gross Income from the Dependency Tests rules.
Not sure if it is the same for filing requirement.

Gross income. For purposes of the dependency rules, gross income
is all taxable income before adjustments and deductions
including:
• Schedule C income less cost of goods sold. Other Schedule C
deductions do not reduce gross income.
• Gross receipts from rental property. Do not deduct taxes, repairs,
etc.
• Partner’s share of the gross, not the net, partnership income.

Gross income does not include:
• Nontaxable Social Security.
• Income received by a permanently and totally disabled individual
for services performed at a sheltered workshop. Income
must come solely from activities at the workshop that are incident
to medical care. Sheltered workshops are schools operated
by tax-exempt organizations that provide training designed to
alleviate disabilities.

[Kram BergGold]

Think of it this way

If the client received a 1099 for $20,000 of rent would you file? Of course you would.

[Black Bart]

I'm right there with you, Susie,

In determining if taxpayer is required to file a tax return; if taxpayer has rental, do you consider the gross or net income from rental as part of overall income?

You're not the only dumbster in the bunch. I was just ponderin' the same puzzle last night -- my guy had $22K gross rent, but owed no tax (fed or state). So...I was a'thinkin' -- "Hmmm...what's "gross"? But then, intuition (not Intuit) struck and it sunk in -- IRS cain't use net E because taxpayers (like mine) would simply say to themselves "Self, we lost money last year -- why file a loss?" If they did that, then IRS would never get a chance to audit and adjust things. And think about all those unclaimed 1099s that would be floatin' around without a home...no, it just wouldn't do.

And now, Kram, has confirmed my suspicions and speculations with just the kind of deep research in which I occasionally dabble.

If the client received a 1099 for $20,000 of rent would you file? Of course you would.

[Larmil]

From Pub 17

You're not the only dumbster in the bunch. I was just ponderin' the same puzzle last night -- my guy had $22K gross rent, but owed no tax (fed or state). So...I was a'thinkin' -- "Hmmm...what's "gross"? But then, intuition (not Intuit) struck and it sunk in -- IRS cain't use net E because taxpayers (like mine) would simply say to themselves "Self, we lost money last year -- why file a loss?" If they did that, then IRS would never get a chance to audit and adjust things. And think about all those unclaimed 1099s that would be floatin' around without a home...no, it just wouldn't do.

And now, Kram, has confirmed by suspicions and speculations with just the kind of deep research in which I occasionally dabble.

Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you may exclude part a joint return, enter the SSNs in the same order or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2008 or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits.

[Black Bart]

Well thanx, Larmil,

Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you may exclude part a joint return, enter the SSNs in the same order or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2008 or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits.

but if it's all the same and you don't mind, I kinda prefer Kram's abbreviated explanations --they're so direct and quick (not to mention less trouble), you see.

Appreciate the thought anyway though!

Best regards, BB

[taxxcpa]

No 1099

If the client received a 1099 for $20,000 of rent would you file? Of course you would.

A 1099 would force you to file. I have a rent house and rent it to an individual who does not send me a 1099, so I could avoid filing, but with all that depreciation I end up showing a tax loss even though I'm making money on a cash-flow basis.

[joanmcq]

Gross is gross. I got a letter once from Idaho early on in my career when I confused 'gross' ID income with net for a client with an ID rental. never again. But each state has a different filing requirement, so you have to look them up. But for rentals, usually you want to establish basis and any loss C/Fs that could be used when the property is sold.

[joanmcq]

Gross is gross. I got a letter once from Idaho early on in my career when I confused 'gross' ID income with net for a client with an ID rental. never again. But each state has a different filing requirement, so you have to look them up. But for rentals, usually you want to establish basis and any loss C/Fs that could be used when the property is sold.

[joanmcq]

Gross is gross. I got a letter once from Idaho early on in my career when I confused 'gross' ID income with net for a client with an ID rental. never again. But each state has a different filing requirement, so you have to look them up. But for rentals, usually you want to establish basis and any loss C/Fs that could be used when the property is sold.

[abctax]

hiccups

Joan, have you got them.... :-)

[Black Bart]

Now see there, Larmil?

Gross is gross.

That's the style I was

(Thanx Larmil,) but if it's all the same and you don't mind, I kinda prefer Kram's abbreviated explanations --they're so direct and quick (not to mention less trouble), you see. Appreciate the thought anyway though! Best regards, BB

talkin' about.

Joan's explanations are immediate and apparent -- bringing to mind the "Simon"-ized drop-dead bluntness of that talent show hanging judge, while, as an advocate of "Southern politeness," I prefer a softer, muted response (example: "While agreeing in principle with your enlightened view, may I pretty please with sugar suggest a similar, yet alternative, approach to this problem...blah, blah, blah"). See?

The downside is people often don't know what the hell I'm sayin' (not to mention they're in a hurry). Still, I'm workin' on.......a similar, yet alternative, approach to this problem....