The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Tax on inherited IRA Date:  2/21/2013  7:18 PM
Author:  RBMunkin Number:  117839 of 133502

Ok, so how would one categorize it if you buy a house, fix it up, and rent it out for weekends or maybe a week at a time? I assumed that would be a schedule E vacation rental. Then there is the question of if it is active or passive. From what I've read, if you spend more than 750 hours per year AND 50% or more of your work-related hours on this vacation rental business, then it is active and thus your losses are not limited as in a passive business.

Either that or is it a schedule C self-employment business, where again your losses aren't limited. But the downside here is that when you have gains you have to pay SE tax, whereas with Sch E you don't.

Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us