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EIC was denied because ct rented a lot?

Forum|Forum|6 years ago
December 7, 2019
16 replies
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Have talked to IRS and they said the rental of the lot was investment income and

EIC was denied. Intuit has the EIC included in the return. Refund was taken off

ProSeries Professional

This topic has been closed for replies.

Best answer by abctax55

Do you have it tagged as land? Land rentals get treated differently, for some reason. Lacerte gives the ability to select the type of rental, and I remember some diagnostics when "land" is selected.

Just-Lisa-Now-

Intuit Community Champion

Where did the lot rental get included? On Sch E?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

C

crichardson552Author

Level 2

Schedule e

Just-Lisa-Now-

Intuit Community Champion

I feel like I saw someone in the Facebook ProSeries group a few weeks ago that had a similar situation, the software wasn't counting rental income as investment income and IRS disallowed their EIC.

I don't think Ive had any clients with rental income that also qualify for EIC....I'll be sure to be on the lookout ofr that now though.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Ernie

Level 7

Is this a problem that should be reported to development?

Just-Lisa-Now-

Intuit Community Champion

That's what Im wondering too....

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Intuit Community Champion

I cant even think of a client I might have that would fall into this situation for me to go look at their return, without having to make a bunch of "what if" changes to it.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Intuit Community Champion

OK, I found one Gave 6000 in W2 and 3900 on Sch E, single family home...no EIC computed.
BUT if I switch the Sch E to be LAND, not a single family home, then EIC does compute.
(self rental property type also allows EIC)

I guess the question is...is that correct?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

abctax55Answer

Level 15

Do you have it tagged as land? Land rentals get treated differently, for some reason. Lacerte gives the ability to select the type of rental, and I remember some diagnostics when "land" is selected.

HumanKind... Be Both

T

TaxGuyBill

Even then, it should be disqualified investment income.

§32 disqualifies (1) "rents or royalties not derived in the ordinary course of a trade or business", AND (2) passive activity income.

Rental of land is non-passive, so it would avoid that. But it would still likely be "rents or royalties not derived in the ordinary course of a trade or business".

abctax55

Level 15

From three years ago, FWIW.

https://accountants-community.intuit.com/questions/1356896-land-rent-and-eic

HumanKind... Be Both

T

TaxLady8

Level 2

I am researching if land rent is part of investment income because of eic as well. I cannot get this link to go anywhere. Do you have any recollection what it was about. I know that is asking a lot to remember that long ago.

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