I have a client who is renting out their camper to a construciton comapny for 3- 4 months. They will be recieiving a 1099 for this income. Do I report this income on schedule E? Also what about depreciation if their intent is to continue using the camper as a rental again next year?
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It appears the client is not in the business of personal property rental. Therefore, to be down and dirty, I would be inclined to treat it as PPR on Line 21. Any expenses associated with it would go on Line 36 with a description of PPR as I recall. -
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Is the camper being used for workers to sleep in? If yes, then I think it would go on Schedule EComment
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I think it is a good question. As a vehicle, a camper is personal property. But if it has sleeping, cooking, and toilet facilities and used as such, it can qualify as a second home and any interest expense is deductible on Schedule A. Thus, as a second home, it is real property. You would think that same line of logic would transform its personal property status to real estate status for purposes of reporting it on Schedule E instead of line 21 of the 1040.
What is the answer?
TheTaxBook page 7-7 has a discussion on the mixed-use property rules, better known as the vacation home rules. In defining a dwelling unit that is subject to these rules, it says:
Note the mobile home and boat references. Thus, if the camper meets the dwelling unit rules of having sleeping space, toilet, and cooking facilities, and it is rented for more than a few days at a time, it is a real property rental reported on Schedule E. If on the other hand, it is merely used as an office during the day, storage unit, or boarding on a short term basis such as a hotel or motel, then it is not real estate and line 21 of the 1040 or Schedule C would be the place to put it. I would say depreciation rules also are dependent on what you classify it as (real property or personal property).Dwelling unit defined. A dwelling unit includes a house, apartment,
condominium, mobile home, boat, vacation home, or similar
property if the property contains basic living accommodations
such as sleeping space, toilet, and cooking facilities. A dwelling
unit does not include property used solely as a hotel, motel, inn
or similar establishment.Last edited by Bees Knees; 08-28-2008, 07:35 AM.Comment
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Bees:
Thus, as a second home, it is real property.
How do you get there?Comment
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TTB, page 9-9 under the heading "27.5 –year property — Residential rental property"
TTB page 4-11:This is any building or structure, such as a rental home
(including a mobile home), if 80% or more of its gross
rental income for the tax year is from dwelling units. A
dwelling unit is a house or apartment used to provide
living accommodations in a building or structure.
It does not include a unit in a hotel, motel, or other
establishment where more than half the units are used
on a transient basis. If the taxpayer occupies any part
of the building or structure for personal use, its gross
rental income includes the fair market value of the part
occupied by the taxpayer.
Section 163(h) refers to Section 280A(d)(1) for the definition of a second home that qualifies for the mortgage interest deduction. That section also uses the term "dwelling unit" to describe such a home. Thus the same definition of a "dwelling unit" is used to describe a 2nd home that qualifies for the mortgage interest deduction in Section 163(h) and a "dwelling unit" that qualifies for the 27.5 year class life on residential rental property. Residential rental property is real property.Home defined. A home is defined as any house, condominium, cooperative,
mobile home, boat, or similar property with basic living
accommodations including sleeping, toilet, and cooking facilities.Last edited by Bees Knees; 08-28-2008, 06:00 PM.Comment
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