Required to file?

[Bill Tubbs]

MFJ with about $18,000 income (excluding Sch E rental -- owner-occupied rental), both 65yo. Their filing requirement is $20,900, so if they didn't have the Sch E rental then they would not have a filing requirement. Their Sch E has been having $6000 gross income but breaking even or having a taxable loss (due to depreciation). So, when looking at the requirement regarding whether or not they need to file, do we look at the gross income from Sch E, or the net income(loss)?

Any good arguments either way?

Thanks,
Bill

[erchess]

My Two Cents

To see if they have to file total up the rental INCOME ONLY and add that to other income. What I'm going by is that's what I would do with self employment activity and I can't see that a rental or Sch F would be handled differently.

[Bucky]

Gross rent plus other income. Looks like they need to file.

[S T]

From

Irs Code Section 61

The IRS under IRS Code Section 61. has defined gross income as all income from whatever source derived, including (but not limited to) the following items:

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.

Sandy

[Bill Tubbs]

Thanks

Thank you all. That's what I thought. I was hoping to have one less return to do.

Bill

[gkaiseril]

If they do not file, you would still need to track the depreciation.