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Level 3
July 6, 2020
Question

Invest in storage facility

  • July 6, 2020
  • 1 reply
  • 15 views

Client invests in storage buildings but has no ownership in the building.  It is like he loans money to the storage facility with no ownership interested and gets repaid at interest plus return of capital.  Should this be treated as interest income only or if he does it with many facilities as a business, should this be reported on a schedule C?

Thanks!

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1 reply

July 6, 2020

*IF* he is in the "business" of lending money, it would go on Schedule C.

You may want to look at the Hobby vs Business rules to help you figure out if it is a "business" or not.