Business or Rental?

[tonia2021]

Taxpayer has decided to start a business. He is renting out his farmstead to hunters. They are paying for his expertise in hunting areas and also paying to stay in the house. The hunting season is only about 3 months long. Taxpayer doesn't live in the house but does have utilities and expenses all year long. Should I only deduct the expenses for the time that hunters are staying in the house? Taxpayer is hoping to make this a profitable venture that would cover more time during the year.

[ChEAr$]

Taxpayer has decided to start a business. He is renting out his farmstead to hunters. They are paying for his expertise in hunting areas and also paying to stay in the house. The hunting season is only about 3 months long. Taxpayer doesn't live in the house but does have utilities and expenses all year long. Should I only deduct the expenses for the time that hunters are staying in the house? Taxpayer is hoping to make this a profitable venture that would cover more time during the year.

You didn't ask the question directly, but this is a schedule c activity; not rental.

Expenses are allowed only for the 3 months of hunting season. Rest of time it's a personal use property.

[tonia2021]

Thanks - that is what I thought.

[Dusty2004]

Why

You didn't ask the question directly, but this is a schedule c activity; not rental.

Expenses are allowed only for the 3 months of hunting season. Rest of time it's a personal use property.

Why would they be able to deduct expenses for 3 months of the year? If I only do taxes and have an office could I not deduct the full years worth of utilities?

Dusty

[ChEAr$]

Why would they be able to deduct expenses for 3 months of the year? If I only do taxes and have an office could I not deduct the full years worth of utilities?

Dusty

If you are renting an office, and don't use it for 9 months (??) why not just turn off utilities?

Seriously, if you're in the tax business, you are open all year; aren't you?
If not you should be.

[tpnl]

Our second location

is only open for tax season. Our main office is open all year and we have many monthly business clients, payroll, etc.

Anyone who has their taxes done at the second location knows they can call or stop by the main office anytime to get help.

I am sure my employer takes a dedection for the rent and utilities he pays there for all 12 months and not just Jan 1st to April 15th.

[oceanlovin'ea]

available the rest of year?

A good question to ask him is if the property is available to be rented at other times during the year. Maybe people would just enjoy getting away to the woods for a vacation.

If it is available the rest of the year and he is not using it for personal use, then I think he could take all the expenses.

Linda