I had a tax question and wonder if you can help me. I called IRS several times to get answers and was even more confused after spoke with Reps there since they gave me different answers each time.
I have a side business (acquiring rental properties and getting them rented) besides a 9-5 regular office job. My rental business has been operated under my (sole proprietorship) company. This company was established back in 2005/2006 under general business category, but since last year it's been dedicated to rental business. I wonder whether I should report the rental income/expenses under Schedule C (if you are in this RE business) or Schedule E (for supplemental income/expenses), which gave me very different results in tax.
The IRS reps told me that since I have a sole proprietorship bsuiness dedicated to the real estate business, I should report income in Schedule C. However, I was confused while reading publication 334, page 21, Real Estate Rents section. That language seems to indicate I should file in Schedule E instead of C, since I am not a dealer who makes commission/profit by selling/renting properties, I am just renting out my own several properties.
I am not prone to either option, but just wanted to get clarification and file tax correctly.
Thanks a lot!!
