Self-Employed Health Insurance - Rental

[Bill Tubbs]

New client, upon advise of prior preparer, had his health insurance issued under his business name. That meets one criteria for deducting the health insurance as Self-Employed Health Insurance (Form 1040, Line 29). But does the definition of Self-Employed here include Sch E? (They have 20,000+ in net income from storage units they rent out on their personal Sch E.)

Bill

[taxea]

You said "under his business name". Has he elected to do his rental through a Sch C?
Is he in the business of renting properties? If they are Sch E only then this won't fly. taxea

[WhiteOleander]

Income must be subject to SE tax to be able to take the self employeed health ins deduction.

[Bill Tubbs]

Sch E

Nope, this is Sch E, not a Sch C. He does have a name that he's using as his "rental business", and the health insurance has that business name.

Just wanted to make sure I wasn't missing something...

Thanks,
Bill

[Kram BergGold]

Read the rules

You have to get the rentals onto Scheudle C to use SE health. So read the rules as to when a rental is a business. Like a B & B is a business not a rental. S tore renting video CD's is a business not a rental. Maybe you can something that qualifies renting storage spaces as a business not a rental.

[Bill Tubbs]

Storage spaces

Rental of storage spaces seems to me to be a clear-cut Sch E. There are no other personal services that are provided.

Thanks all.

[ChEAr$]

But it's not

Rental of storage spaces seems to me to be a clear-cut Sch E. There are no other personal services that are provided.

Thanks all.

rental of storage space IS schedule c activity.

schedule e is for rental real estate. and royalties on page 1.

[Gene V]

self-storage rental

You might be interested in looking this case up.--Its about a lawyer wanting to
deduct his self-storage rental loss against his schedule C income.



ROGER G. HOPPER AND HELEN H. HOPPER, PETITIONERS v. COMMISSIONER
OF INTERNAL REVENUE, RESPONDENT

Docket No. 22123-87. Filed March 27, 1990.


Income and expenses related to the business of renting self-storage
units are found to be "rentals [and deductions] from real estate" within
the meaning of sec. 1402(a)(1), I.R.C. 1954, and sec. 1.1402(a)-4(a) and
(c), Income Tax Regs., and are therefore excludable from the computation
of net earnings from self-employment. P cannot offset his share of the net
loss from the self-storage business against income from his law practice
in determining net earnings from self-employment which are subject to
self-employment tax.

[Jesse]

http://www.thetaxbook.com/forums/showthread.php?t=8905&page=2&highlight=storage+unit+rental

This was an interesting discussion. Take a look at Veritas' post for additional cites.