Can campground site rent income be reported on schedule E so that it is not subject to SE tax?

Forum|Forum|6 years ago
December 7, 2019
7 replies
15 views

Site rent is the major income for this business. Any other income is incidental and totals less than 1% of total income from campground.

ProSeries Basic

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Best answer by rbynaker

Sure sounds like Schedule C to me. A lot of this is defined by case law which you'll have to research In terms of Regs, what we're really talking about here is SE tax so you're looking at section 1402 and particularly on point Reg 1.1402(a)-4:

https://www.law.cornell.edu/cfr/text/26/1.1402(a)-4

Skip down to "(c) Rentals from living quarters" and see what you think. "Tourist camps" and "parking lots" are specifically mentioned in (c)(2) as subject to SE tax. I think of a campground as a giant parking lot with really big parking spaces. :) And they usually have bathrooms/showers available. Unless they just have a pit toilet a quarter mile down wind, somebody is providing cleaning services for the bathroom!

Rick

sjrcpa

Level 15

Are services provided?

The more I know the more I don’t know.

G

gslaytonAuthor

Level 3

No.

rbynaker

Level 13

What's the average rental period?

G

gslaytonAuthor

Level 3

2/3 annual, 1/3 overnite

rbynaker

Level 13

You might look at all of the discussions surrounding QBI and "rising to the level of a trade or business". Have the facts and circumstances changed over the years? I would do a lot of research before making this switch. There are definitely factors in favor of this being on Sch E. I would think there's still grounds maintenance (maybe that's minimal). With 1/3 overnites I'd also expect an office staffed daily so somebody may be putting in significant hours each year.

Would it be possible to bifurcate the activities? Are the annual rentals in a different section?

G

gslaytonAuthor

Level 3

The owner works many hours doing maintenance (mowing, repairing electrical and plumbing systems, picking up fallen limbs, office work (most office work is handled by his family) etc.). I think you've had me looking in the right direction for this issue. Thank you very much.

rbynakerAnswer

Level 13

Sure sounds like Schedule C to me. A lot of this is defined by case law which you'll have to research In terms of Regs, what we're really talking about here is SE tax so you're looking at section 1402 and particularly on point Reg 1.1402(a)-4:

https://www.law.cornell.edu/cfr/text/26/1.1402(a)-4

Skip down to "(c) Rentals from living quarters" and see what you think. "Tourist camps" and "parking lots" are specifically mentioned in (c)(2) as subject to SE tax. I think of a campground as a giant parking lot with really big parking spaces. :) And they usually have bathrooms/showers available. Unless they just have a pit toilet a quarter mile down wind, somebody is providing cleaning services for the bathroom!

Rick

G

gslaytonAuthor

Level 3

I've been doing Schedule C but just wanted another opinion. Thank you very much. Greg

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