Heavy Equipment Rental

[Acownt4it]

TP's occupation is a welder for a company that lays pipe lines. The company used a piece of heavy equipment from the TP and gave him a 1099-Misc for rent. TP said that the companies weren't suppose to be sending out 1099's anymore for this type of activity and that it should be classified as a reimbursement. Has anyone heard of this? Can I put this "rent" on Line 12-Other income and attach a note?

[Matt Sova]

Machine Rental

Rental of equipment goes on Schedule C. You can depreciate the equipment, but you cannot Sec 179 the equipment because this is, more than likely, not an active trade or business. Also, if the expenses exceed the income then you will probably have a passive activity loss.

[Bird Legs]

Heavy Equip. Rental

Wasn't there a discussion about this awile back on one of the boards. Can not remember which one. It was decided that there was something in the tax law that exempted
this type of rental, in this particular type of business, from income tax?

[KBTS]

Link

Here is the link to the previous discussion.

https://www.thetaxbook.com/forums/showthread.php?postid=6679#poststop

[Acownt4it]

That is

what the TP was trying to tell me. He said something like:"The IRS doesn't want them to report this income any more." I said I would look it up, but I don't know what to search under. I went to the IRS website and typed in:
Heavy Equipment Rental
Equipment Rental
Employee Rental
and of course there were numerous hits, but I couldn't find anything that related to this particular case.

[Acownt4it]

Thank You!!

for providing that link. That is exactly the case.
You people are the greatest.

[Acownt4it]

Dumb ?

Okay, one more question regarding this issue. He doesn't have to claim the rental income, but he received a 1099-Misc. Do I enter the information in with no $ amount and attach a note siting the Rev. Proc.?

[Bird Legs]

Reporting the 1099 income

Report the income on the schedule but then in the expenses show a deduction for the
same amount. leaving a zero balance. This way it does get reported so the IRS can match the 1099 with the return.

[skhyatt]

Just read

I just read Rev Rul 2002-35. So is/was this an accountable plan and if so, then does it get reported on Sch C?

[Acownt4it]

thanks

for your help everyone

[skhyatt]

so which was it?

I Read Rev Rul 2002-35. So is/was this an accountable plan and if so, then does it get reported on Sch C?

[Acownt4it]

I haven't

talked with my client yet to ask him about his companies reimbursement plan. But, if it is an accountable plan, I will be using the Sched. C.