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Rental Activities Not Automatically Treated as Passive Include, Average period of customer use is 7 days or less (motels), Average period of customer use is 30 days or less with significant personal services provided, and 5 other categories. From Reg.1.469-1 T
IRS Instructions for Schedule SE, Other Income and Losses Included in Net Earnings From Self-Employment #3. Payments for the use of rooms or other space when you also provide substantial services.....examples are hotel rooms, etc.
So it is a business activity. I have checked the Rental Real Estate Activity is a trade is business check box. I don't find any way to
I have suggested for future years the person who prepares the 1065 and issues the K-1 should consider designating the Income as Business Income and/or make an entrance on the K-1 Part III, line 14 Self-Employment earnings.
The client should be paying into their Social Security account on this income.