Self-rented property
Here's how to specify that the taxpayer is renting to a nonpassive activity, or self-rented property.
In the Rent screen, enter the code
7
for self-rental in the Type
field. UltraTax CS uses the recharacterization rules for the activity. For partnerships and S Corporations, enter the code
4
for property rental to nonpassive activity in the Recharacterization of passive income
field on the K1-7 screen. The application uses the recharacterization rules for the pass-through activity.For trusts and estates, enter the code
4
for property rental to nonpassive activity in the Recharacterization of income
field of the K1T-3 screen. The application uses the recharacterization rules for the pass-through activity.If there is a rental of property to a nonpassive activity, some income may be recharacterized and excluded from passive income.
Publication 925, Passive Activity and At-Risk Rules
contain instructions on how to report income or loss from such activities.- If there is net loss, income and losses are treated the same as any other passive income or loss.
- If there is net income, no income or loss is reported on Form 8582.
