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How to file small rental income

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maqekufy

New member
What is the name of your state?ca
My wife owns property overseas (apt in condhotel). We use it as a second home basically for 3-4 months a year, and it has not been our intention to rent it the rest of the time.Last year however we let a friend of family use it for 15 days at around $45 a day. Can this just be entered on tax return as miscellaneous income ?
 


Taxing Matters

Overtaxed Member
It would have been easier if had been rented just 14 days of the year instead of 15. In that case you could have left the income off the return entirely. See page 19 of Publication 527. Technically you should use Schedule E to report this income and take any deductions you had associated with it. Given the small amount involved and the limited time, you could report it as miscellaneous income if you are willing to forego any deductions for the rental, including deprecation. The IRS won't make a big deal out of that as all the income was reported from the rental. Bear in mind that when you sell the place you must reduce your basis by the depreciation you actually took or that you could have taken. While that depreciation wouldn't be much in this instance, you still want to pay attention to it.
 

maqekufy

New member
Yes 14 days would have made things easier. I am not interested at the moment in deductions and depreciation....maybe in the future if we decide to rent it out on a consistent basis. So to make it simple I could just declare it as miscellaneous income and not have a problem ? Our family oversees took the payment and we let them have some small commission, but as I said just interested in making sure it's reported and not worried about deductions. If we don't rent in the future then is there any need to depreciate ?
 

Taxing Matters

Overtaxed Member
Yes 14 days would have made things easier. I am not interested at the moment in deductions and depreciation....maybe in the future if we decide to rent it out on a consistent basis. So to make it simple I could just declare it as miscellaneous income and not have a problem ? Our family oversees took the payment and we let them have some small commission, but as I said just interested in making sure it's reported and not worried about deductions. If we don't rent in the future then is there any need to depreciate ?
If you are content to include all the income from rental without any deductions then I don't see a problem in this instance of simply including it all as miscellaneous income. If you don't do any further rentals then there is no more depreciation to take. But when you sell the property you will still have to make the small adjustment to basis for the depreciation you could have taken.
 
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