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Can campground site rent income be reported on schedule E so that it is not subject to SE tax?

gslayton
Level 3

Site rent is the major income for this business. Any other income is incidental and totals less than 1% of total income from campground.

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rbynaker
Level 11
Sure sounds like Schedule C to me.  A lot of this is defined by case law which you'll have to research  In terms of Regs, what we're really talking about here is SE tax so you're looking at section 1402 and particularly on point Reg 1.1402(a)-4:

https://www.law.cornell.edu/cfr/text/26/1.1402(a)-4

Skip down to "(c) Rentals from living quarters" and see what you think.  "Tourist camps" and "parking lots" are specifically mentioned in (c)(2) as subject to SE tax.  I think of a campground as a giant parking lot with really big parking spaces. 🙂  And they usually have bathrooms/showers available.  Unless they just have a pit toilet a quarter mile down wind, somebody is providing cleaning services for the bathroom!

Rick

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9 Replies 9
sjrcpa
Level 15
Are services provided?

ex-AllStar
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gslayton
Level 3
No.
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rbynaker
Level 11
What's the average rental period?
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gslayton
Level 3
2/3 annual, 1/3 overnite
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rbynaker
Level 11
You might look at all of the discussions surrounding QBI and "rising to the level of a trade or business".  Have the facts and circumstances changed over the years?  I would do a lot of research before making this switch.  There are definitely factors in favor of this being on Sch E.  I would think there's still grounds maintenance (maybe that's minimal).  With 1/3 overnites I'd also expect an office staffed daily so somebody may be putting in significant hours each year.

Would it be possible to bifurcate the activities?  Are the annual rentals in a different section?
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gslayton
Level 3
The owner works many hours doing maintenance (mowing, repairing electrical and plumbing systems, picking up fallen limbs, office work (most office work is handled by his family) etc.).  I think you've had me looking in the right direction for this issue. Thank you very much.
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rbynaker
Level 11
Sure sounds like Schedule C to me.  A lot of this is defined by case law which you'll have to research  In terms of Regs, what we're really talking about here is SE tax so you're looking at section 1402 and particularly on point Reg 1.1402(a)-4:

https://www.law.cornell.edu/cfr/text/26/1.1402(a)-4

Skip down to "(c) Rentals from living quarters" and see what you think.  "Tourist camps" and "parking lots" are specifically mentioned in (c)(2) as subject to SE tax.  I think of a campground as a giant parking lot with really big parking spaces. 🙂  And they usually have bathrooms/showers available.  Unless they just have a pit toilet a quarter mile down wind, somebody is providing cleaning services for the bathroom!

Rick

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gslayton
Level 3
I've been doing Schedule C but just wanted another opinion. Thank you very much. Greg
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rbynaker
Level 11
Happy to help, a pretty fun research project.
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