Rental Earned Income Allows EITC?

[OtisMozzetti]

I have drawn the duty of teaching a class in Rental Real Estate (Schedule E) to a group of tax professionals. The textbook states that if there are substantial services provided along with the real estate which the tenant is allowed to use, then the landlord had "business earned income".

So, does this mean that if Grandpa and Grandma are retired with no income other than a rental house, and they have two orphan grandchildren who are their qualifying children, they can claim an earned income credit based upon (all?) the rent if Grandpa also furnishes weekly housecleaning service to their tenant?

[solomon]

No such luck. That would not turn a rental into a business reportable on Sch C for EIC.

See Reg. 1.469-1T(e)(3)(ii) and the paragraphs thereunder.

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=a6c01a9dd7f7c127f3b222f940dd8225&rgn=div8&view=text&node=26:6.0.1.1.1.0.6.125&idno=26

[ChEAr$]

And even IF it did,

No such luck. That would not turn a rental into a business reportable on Sch C for EIC.

See Reg. 1.469-1T(e)(3)(ii) and the paragraphs thereunder.

http://ecfr.gpoaccess.gov/cgi/t/text....6.125&idno=26

could you convince grandpa and grandma that they would now have to pay SE tax to
Social Security? (grin

[solomon]

could you convince grandpa and grandma that they would now have to pay SE tax to
Social Security? (grin

I think grandpa and grandma would fire me and seek another preparer.

[ChEAr$]

right!

I think grandpa and grandma would fire me and seek another preparer.

Cause everybody knows you don't have to pay social security tax after a certain age. (grin

[JohnH]

Cause everybody knows you don't have to pay social security tax after a certain age. (grin

Tell me again what that age is. My hairstylist and mechanic have been giving me conflicting answers on it.