My client receives 1099misc box 1 rentals income for letting his neighbor have passage across a portion of his land to access their property. would there be a difference between reporting it on line 21 vs sched e?
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Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
Would use Schedule E
I agree with ATSMAN.
While there may not be much (if anything, other than a piece of the property taxes) to offset the income, NOT putting "rental" income on a Schedule E if such is reported as "rental income" on the Form 1099-MISC might result in some unexpected later surprises from those IRS computers.
You can easily call it "land rent" or "easement rental" or something comparable. Years ago I had a client with a similar scenario where a nationwide advertising firm "rented" a small amount of square footage as a base for large highway billboards. Client had no expenses of any kind, except we did snip a bit from property taxes for the Schedule E.
(I did get a chuckle out of the "you can't depreciate land" comment. While that should be a gimme, these days it might not. I've encountered folks. . .some of the tax pro type. . .who just didn't want "to mess with any depreciation" on a piece of rental property. I guess that pendulum can swing both ways.
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FEComment
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Why would you even think about NOT putting it on Schedule E?Roland Slugg
"I do what I can."Comment
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About 15 yrs back a state highway cut my town in half. There are two ramps that blocked the front view of a bunch of homes and apartments. The state by eminent domain acquired a bunch of land and forced the abutters to give up 4 feet for sidewalks in certain portions along the road. There was big talk about added depreciation because of loss of view, use etc. I actually had clients demand that I depreciate their land!I agree with ATSMAN.
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(I did get a chuckle out of the "you can't depreciate land" comment. While that should be a gimme, these days it might not. I've encountered folks. . .some of the tax pro type. . .who just didn't want "to mess with any depreciation" on a piece of rental property. I guess that pendulum can swing both ways.)
FETaxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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"Truck"
I had a new client (this was a few years ago) that showed me his previous return prepared by a "good ol' boy". This good ol' boy was in his eighties (nothing wrong with that by the way) but on his Schedule E the preparer reported water royalties paid by an oil/gas company to my client. He also depreciated a truck against the income. On the Schedule E, other expenses, he hand wrote (hand written return) the words, "Truck" as the expense description and deducted about $15,000. Hilarious!
You can't make this stuff up.Circular 230 Disclosure:
Don't even think about using the information in this message!Comment
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