1040-US: Self-rented property

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IRS filing deadline update

The IRS MeF system is now processing returns, and the filing deadline has been extended to 11:59 PM on Wednesday, April 18, 2018. For the latest details, see UltraTax CS alerts and notices.

Question

How do I specify in UltraTax CS that the taxpayer is renting to a nonpassive activity, also known as "self-rented property?"

Answer

In Screen Rent, enter code 7 (Self-rental) in the Type field. UltraTax CS uses the recharacterization rules for the activity.

For partnerships and S Corporations, enter code 4 (property rental to nonpassive activity) in the Recharacterization of passive income field in Screen K1-7. UltraTax CS uses the recharacterization rules for the pass-through activity.

For trusts and estates, enter code 4 (property rental to nonpassive activity) in the Recharacterization of income field in Screen K1T-3. UltraTax CS uses the recharacterization rules for the pass-through activity.

If there is a rental of property to a nonpassive activity, certain income may be recharacterized and excluded from passive income. Publication 925, Passive Activity and At-Risk Rules contain instructions on how to report income/loss from such activities.

Related topic: Passive loss information FAQs (1040)

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