Schedule E or Schedule C

[ihot]

What is the name of your state? CA
Hi,
I rent a room (in my home) out to my Corporation who uses it for its home office. My Corp gives my wife a 1099misc. I was told my wife had to file a Schedule E and report her rent income there. Is that adviseable? Or should we try to report it under Schedule C? She is a homemaker (we are just trying to claim home office for our Corp).

 

[LdiJ]

What is the name of your state? CA
Hi,
I rent a room (in my home) out to my Corporation who uses it for its home office. My Corp gives my wife a 1099misc. I was told my wife had to file a Schedule E and report her rent income there. Is that adviseable? Or should we try to report it under Schedule C? She is a homemaker (we are just trying to claim home office for our Corp).

If you are reporting it properly on the 1099 misc...it would be schedule E.

 

[FlyingRon]

1040 Schedule E, line 3. Rents received.

 

[ihot]

can I sublease a room in townhouse I leased

Hi,
1) I leased a townhouse for my home. Can my wife sublease one of the rooms to my S corporation (for its office) and charge rent to my S Corporation?

Assuming the answer to the above scenario is "Yes", then....
2) Technically, wife does not have depreciation to report (as we do not own this townhouse). How then can my wife report depreciation when she files that rent income in Schedule E's Rent Received (line 3)? I think IRS requires that I report depreciation.

 

[FlyingRon]

Yes, you can rent the room.
Yes, you must deduct the depreciation.

Here's the official IRS Pub on the matter
http://www.irs.gov/pub/irs-pdf/p587.pdf

 

[abezon]

There's no 'technically' about it. You cannot depreciate something you do not own. Nor may the IRS require you to depreciate a condo you don't own. If it did, the condo would be double-depreciated -- once by the owner & once by your wife. Your wife is not the owner, she is a tenant who is sub-leasing. No depreciation allowed.

 

[FlyingRon]

Oops, yes, I missed the fact that he didn't own the house. Ignore my comments.