Small trailer park schedule E or Schedule C

[PATAX]

Got a new client and they have a very small trailer park that they bought last year, 2021. Client used to work for tax preparation service, and said it was Schedule C. My buddy retired irs agent said schedule E most likely. They rent the land to only two tenants. One tenant owns their own trailer, and the other tenant rents the trailer from the trailer park. What do you guys think? Thanks in advance.

[Just-Lisa-Now-]

I had one of these that I inherited from the EA I worked for when he retired, he had always done it on Sch E, so I continued along the same way.

[TaxGuyBill · Accepted solution]

The determination of Schedule E versus Schedule C is dependent on if "services" are provided.

If it is ONLY renting land and the mobile home (which isn't really mobile), then it is definitely Schedule E.

If there are other things involved, it depends on exactly what the other things are.

[qbteachmt]

Break it down.

They bought Land.

They bought a Trailer.

Do they also operate a Park: grocery store, hook ups, playground, common facilities such as laundry, pool, do they mow and have staff? Or, is this rentals and not a business operation?

[PATAX]

Thanks, I think it is just the land and the two trailers for now. She is coming in next week for the appointment. I don't think there's a grocery store or anything else like that, as it is quite small.

[IRonMaN]

Once they finish the waterpark and amusement park, it will be a schedule C.  But until then, I would also cast my vote for E.

[PATAX]

Thanks Iron Man. The water park consists of a fungus covered log floating in an abandoned pond that was formerly used to dump cow 🐄crap waste into.... I hope she doesn't show up here with one tooth.....Just joking😉

[jeffmcpa2010]

I can't point to a specific reference but my feeling is it possibly depends on the type of tenant.

If It is the trailer park down the road, with Mobile homes, off their wheels on blocks, with long term tenants that either rent the MH or own it, It feels like an E.

RV Park with primarily Short Term users (couple of nights to a couple of weeks) with a few several month type construction workers - probably that feels more a C. Of course those usually have some of the amenities mentioned earlier.