Wedding or Event Rental

[JoJo]

Is the rental of a wedding venue reported on Schedule C or Schedule E?   No services will be provided.  There will be two dressing rooms, a bathroom, an outside kitchen, a few tables and chairs will be provided.  The bride and groom will be responsible for food, flowers, entertainment, additional tables, chairs, etc.  The owner will be collecting payment only.  This is in preparation of 2022 income tax return but I want to make sure I am giving the correct information.  I am thinking since no services will be provided that it should go on E.   If any services were provided I feel it would go on Schedule C. 

[Jim-from-Ohio · Accepted solution]

When you provide what are classified as basic services to your tenants and you are a sole proprietor, you should use Schedule E. The IRS considers basic services to be things like a place to live, trash collection or general maintenance. Recall that Schedule E does allow you the option to report the expenses you are responsible for related to these services (like how much it costs you to get trash collected on behalf of your tenants or what their heating bills cost).

If, however, you offer more services to tenants, like housekeeping, dry cleaning, meals or maid services, you will need to report your rental income on Schedule C. This is the main difference between Schedule C and E. This is less applicable to most landlords and is more relevant to those running a hotel, boarding house, bed and breakfast or sometimes a rental like an Airbnb or VRBO.

[qbteachmt]

"The owner will be collecting payment only."

Yard prep? Janitorial? Supplies on hand (toilet paper)? Insurance? Light bulbs? Is this venue dual purpose (fall pumpkin barn, summer weddings)?

[rbynaker]

Borderline.  My inclination would be Sch C but I could see facts and circumstances where this could go on E.  Who cleans the bathroom when Uncle Ed clogs up the toilet?  If the Best Man is in the stall with a plunger, okay, maybe no services are provided.

You should be able to tell when they start giving you a list of expenses. 🙂

[JoJo]

That is exactly what I was thinking.  Thank you!

[JoJo]

The venue will not be dual purpose or at least not now.  They probably will provide toilet paper, hand soap (which is something that I didn't think of).  They will probably also provide lawn service.  Now on the other side, I have rental property and provide lawn service and it is reported on E.  I don't however provide toilet paper. 🙂 

Thank you!

[JoJo]

Thank you for your reply.  I would think the owner would clean the bathroom when it is clogged just like I send a plumber to my rental property when there is an issue.  I first thought Schedule C but the client is telling me no services are being provided.  

[qbteachmt]

"You should be able to tell when they start giving you a list of expenses."

Custom signs, decorations, linens, curtains, light/sound system, fairy lights, the new BBQ, patio heaters, etc.  🙂

[rbynaker]

From a tax prep standpoint, "no services" might keep this on Sch E (still might be a stretch given the extreme short-terminess of the rentals).  But at some point your client will hopefully realize that the *real* money in this business is in all of the add-ons (catering, sound/video system, etc.).  Not in the land/barn rental.

[jeffmcpa2010]

I have never seen a rental for a few hours or even a few days that was reported on Schedule E.