Rental Income - Augusta Rule and 280A(g) exception

[cpa72]

Good day all,

I have a client who rented out his personal residence for less than 10 days.  The rental income is exempt under 280A(g).  The tenant issued a 1099- MISC for the amount paid to my client.  Schedule E is throwing off the error when I ender 10 days and 355 personal use days.  My independent research said to enter the 1099 amount on Schedule E and show an expense "280A9g) exception".  Proseries will not allow it.  The error persists.  Do I enter it on Schedule C (AirBnB style for short term rental) or simply attach a footnote to the return explaining the income and the exemption?

As always, your help is greatly appreciated.

[BobKamman]

For those not proficient in tax slang, :"Augusta rule" refers to the location of the Masters Golf Tournament, in Georgia, where many people move out during the week and rent their homes for less than 15 days, so it is nontaxable.  What your are saying is that you can't enter the income amount on Schedule E and the same amount as an expense on the "other" Line 19, with the description "280A(g) exception" (your post put a 9 in there instead of the open parenthesis).  Really?  I don't think the program audits your entries there.  

[cpa72]

Dude,

You got a solution or you just busting chops - typos happen. And if i needed to go into great detail about what the Augusta rule is, then the reader isn't going to have the solution.

Best of luck and stay off my posts.

[TaxGuyBill · Accepted solution]

I would enter zero personal days.  It technically isn't right, but it won't affect anything and should make the program happy.

[cpa72]

Thanks.  I will do that.

[sjrcpa]

@cpa72  You may not like Bob's style but he's helped a whole lot more people here than your 49 posts have.

[cpa72]

I appreciate you and everyone who assists others on this site.  What I don't appreciate is unnecessary sarcastic comments (unprofessional) and those that keep score. 

With that said, if you have nothing to add related to my questions, there is, again, no need to post. 

Have a good end of tax season.

[Taxprohere]

I believe this is an open forum and the original poster doesn't 'own' the post.  Others are free to add or elucidate if they feel it will help others, since other preparers may have the same question.  Lots of readers here, some with a sense of humor, some demanding precision, and some....well, maybe tax season is making some really tense 😠. 

[BobKamman]

@sjrcpa  This turns out to be just another "trick the IRS computer" question.  IRS Pub 527 advises, 

"Used as a home but rented less than 15 days. If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function isn’t considered to be rental and it shouldn’t be reported on Schedule E (Form 1040). You aren’t required to report the rental income and rental expenses from this activity."

But there is no corresponding box on the 1099-MISC for the payer to check for "rented less than 15 days."  And how would IRS know that there are no additional days rented to others at less than $600 so no 1099 was issued?  

If IRS tells me that reporting the income and an offsetting expense on Schedule E is the wrong thing to do, I am loath to disobey just to trick the computer.  I would attach a one-paragraph statement to the return, explaining why the rent is not included in gross income.  Especially if the amount involved is less than $5,000 and the client is in a 10% bracket, because that's unlikely to generate a CP-2000.  But I understand that others play the game differently.  

[BobKamman]

@Taxprohere But I was just trying to show how impressed I was with the metonymy of "Augusta rule."  Weren't you impressed too?  

[sjrcpa]

@BobKamman You forced me to look that up. But learning new words is a good thing.

[Taxprohere]

@BobKamman  I was impressed.   Now I'd like you to use a synecdoche in terms of tax rules or regulations.  That'll be really showing off!  And how some posts can be sidetracked...unintentionally 😉

[BobKamman]

@Taxprohere I've been to New York but I've never been to Schenectady.  Recently I did help answer a question about LawnGuy Land.