In defining self-employment income, Section 1402 (a)(1) contains an exception for rentals from real estate and from personal property leased with real estate. The sole leasing of personal property is subject to SE tax.
A notation at the top of Schedule E directs taxpayers to report income and expenses from the business of renting personal property on Schedule C or C-EZ.
Observation: Combining equipment and real estate leases into a single lease is one solution for those leasing equipment and real estate. When only equipment is leased, the use of an S corporation to act as the lessor may be a viable solution. Although some officer compensation must be withdrawn from the corporation for attending to administrative duties, most of the S-corporate earnings should be able to be extracted as non-FICA shareholder distributions, due to the passive nature of the activity. [ << Previous ] [ Next >> ]
Listing # 305 |
