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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4479
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I rent a room in a commercial bldg, all improvements, etc

Customer Question

I rent a facial room in a commercial bldg, all improvements, etc are at my expense. I then rent that room out to other facialists by the day or hour. How do I report on a 1065, I rent the room with a partner and we formed a partnership
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Do I use form 8825 and other property type select 'SELF-RENTAL' OR 'OTHER'?
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and will assist.

Expert:  PDtax replied 1 year ago.

Subleasing your salon space and equipment is not real estate rent in the tax sense. Your rent paid to your landlord is rent. Your income from facialists is commission or equipment rent. Neither of those arrangements are reported on 8825.

Expert:  PDtax replied 1 year ago.

If you are paid, say, 20% of the fees earned by others, that's commission income. If you instead rent for $30 per hour, regardless of the fees earned, that is equipment rent, and can be reported as such. Neither goes on 8825.

Expert:  PDtax replied 1 year ago.

Please advise if you need anything further. Positive feedback is appreciated. I'm PDtax.