Article Date:
December 2017

Word Count:



Are Your Rental Properties a Business? If So, You Win

Does your rental property activity meet the definition of a trade or business activity?


If yes, your rentals produce the best possible tax benefits.


In general, you report your rental properties on Schedule E of your tax return. When your activity rises to the level of a business, you continue to report the rentals on Schedule E, but with the business classification, you qualify for



tax-favored Section 1231 treatment;


business use of an office in your home;


business (versus investment) treatment of meetings, seminars, and conventions; and


Section 179 treatment of your business-use assets.


Rental as a Business


In Levy,1 the court ruled that the trustees of this estate, by renting the real estate, were engaged in a trade or business. The court then went on to say this:2


Courts have consistently held that the rental of real estate is a "trade or business" if the taxpayer-lessor engages in ... Log in to view full article.

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