Sch C vs Sch E Reporting of Rental Activity

[sali]

I have a client who brought in a tax return from a previous tax preparer. His rental activity of a beach house that is rented for one to two weeks at a time to an individual is reported as Schedule C activity because according to the previous preparer, the property owner provides services for the occupants. The service provided is maid service when the occupant leaves at the end of his stay. Is this correct reporting of the rental? I have always reported rentals on Sch E because the rental properties were not hotel, motel properties. Are there any other things to consider that would qualify a property as Schedule C reportable?

Thanks.

[winnie]

Use Schedule E

Your client must use Schedule E for this rental.

Even to be a real estate professional, you would have to provide substantial services. If memory serves me, that would need to be over 500 hours in a year.

[solomon]

Divide

the total rental days in the year by the number of different rental periods and if the number is 7 days or less then Sch C is correct. If more than 7 days , then Sch E. See Reg. 1.469-1(e)(C)(1)(2).

[Gretel]

What also needs to be considered is if the maid service at the end of each rental period is considered substantial service provided. That also would make it Sch. C. In this case I would say this is not substantial service.

[solomon]

Agree

that in this case there are no significant personal services - which would apply for rental of 30 days or less. Were the maid cleaning and what not every day, that would be different.