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 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.

• 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.

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