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Financial Planning / Tax Strategies
|Subject: Re: Rental Income from a Time-share||Date: 2/8/2013 9:14 PM|
|Author: irasmilo||Number: 117699 of 122503|
My husband and I own 2 weeks at a time-share resort. In 2012, we stayed at the resort for 1 week, and rented out the 2nd week, which was handled by the resort. They sent us a check, after deducting a fee for handling the rental.
The resort sent a 1099-MISC for $760 in Rents. The expenses for owning the week that was rented were Maintenance Fee ($798) and Property Taxes (31). We normally itemize our deductions, but I am unclear on how to handle the rental income and expenses.
Since you didn't rent the property with the intent of making a profit the correct way to report this is to report the income on Form 1040 line 21, deduct the maintenance fee (limited to the amount of income reported) on Schedule A, line 23, and the real estate tax on Schedule A, line 6. See IRS Pub. 526, Residential Rental Property, www.irs.gov/pub/irs-pdf/p526.pdf, pg. 16.
If you presume to have rented for profit (even though you didn't succeed), then you would report all of the income and related expenses on Schedule E. Your loss would probably be limited due to the passive activity rules (see Form 8582).
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