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Self-rented property

Here's how to specify that the taxpayer is renting to a nonpassive activity, or self-rented property.
In the Rent screen, enter the code
7
 for self-rental in the
Type
 field. UltraTax CS uses the recharacterization rules for the activity.
For partnerships and S Corporations, enter the code
4
 for property rental to nonpassive activity in the
Recharacterization of passive income
 field on the K1-7 screen. The application uses the recharacterization rules for the pass-through activity.
For trusts and estates, enter the code
4
 for property rental to nonpassive activity in the
Recharacterization of income
 field of the K1T-3 screen. The application uses the recharacterization rules for the pass-through activity.
If there is a rental of property to a nonpassive activity, some income may be recharacterized and excluded from passive income.
Publication 925, Passive Activity and At-Risk Rules
 contain instructions on how to report income or 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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