New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

How do I indicate in UltraTax CS/1120 I am renting to a nonpassive activity?

Answer

If there is a rental of property to a nonpassive activity, certain income may be recharacterized and excluded from passive activity income. Publication 925, Passive Activity and At-Risk Rules contain instructions on how to report income/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 8810. Instead, the income or loss is reported on the forms and schedules normally used.

To indicate the activity is to be recharacterized, enter X in the Subject to recharacterization rules checkbox in Screen Rent-2. UltraTax CS uses the recharacterization rules for the activity.

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