Tax Law (Questions About Taxes)/Maui condo rental

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Question
Hello:

I need some direction of completing Schedule E and hope you can help.

My wife & I are 1/5 owners of a Maui Condo. We get 70 days per year.
In 2014, we used it 20 days, rented it out for 40 and it was not rented or occupied for 10 days. My wife also takes care of the rental contracts for the other owners earning a 15% commission.
One of the owners issues a statement of maintenance expenses etc from which we derive our maintenance costs etc.

1) Do we mark 100% owner or 20% owner? When we use tax software,  we report our $4000 rental income for the 40 days, it shows up as 1/5 of that, which is not correct. If we mark 100% owner, then we are credited with paying all the taxes and maintenance, which is also in error.

2) The rental commission from renting out the other owners time amounts to $3000.  Does that get reported on Schedule E or as miscellaneous income on another form?

3) How do we figure out the depreciation on the unit? We bought our 20% share for $100K during 01/13 but have no idea where we enter those figures. We do not trust last year's CPA as he made significant errors on other items,

Thanks for your assistance

Answer
John,

Thanks for your question.

1. This is a software issue. Different software handles issues differently, and it is unlikely that I am familiar with your software. Having said that, you may need to override some cells.

2. The commissions are not rental activities and should be reported on Schedule C.

3. Again, different software handles this differently, but basically, your cost basis is entered on Form 4562. Be sure to deduct the value of the common areas from your cost as those are not depreciable. Use MACRS depreciation for residential real estate.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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