Sch C client rents space of 2,400 sf for therapy business but uses only 1,400 sf. Client sub-leases the remaining 1,000 sf out to another business. Is the sub-lease income for this 1,000 sf reported by the client as a reduction of rent on the Sch C? For example, the client pays $1,900 per month for rent expense and receives $700 in sub-lease income. Would the client report rent expense on Sch C of the net amount of $1,200? Or, would the client show $1,900 in rent expense and $700 in 'Other Income' on Line 6 Sch C? Either way would increase self-employment income for the sub-lease income received. I would think reporting the income on Sch E would not apply here.
-
-
Because it is income as a result of your business it should be reported as other income on the schedule C. -
I don't agree. Schedule C and the taxpayer is the same thing. So let's rephrase it.
Taxpayer rents space for $1900. Business expense is $1200.
Taxpayer rents out space for $700. That goes on Schedule E. Nothing about paying or receiving that sublease has to do with his Schedule C business, so it doesn't belong on Schedule C.Comment
-
If it goes on schedule E no SS will be paid on it. That is good?This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
-
Years ago this came up in an audit. The examiner told me it goes on Schedule E. I have been doing it this way ever since. I try to apportion the expenses to the rental income so that it comes out with a small profit.Comment
Comment