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Old 03-26-2018, 12:58 PM
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Renting Co-Owned Equipment to my C Corp

My father-in-law and I bought a commercial fishing boat together. He is 60% owner, and I am 40% owner. I run the boat, and he does nothing with the boat.

We formed a C Corporation and we lease the boat to the C Corporation. The C Corporation is equally owned 50/50 by both of us. We drew up a lease agreement between us and the corporation, and the lease rate is pretty standard.

An accountant told me that I would be able to use 40% of the purchase value of the boat as the basis for depreciation on my taxes, and my father in law could use the other 60% depreciation on form 4562.

My question has to do with the Schedule E, Type of Property. I guess my choices are 7-Self Rental and 8-Other. Which would I put on my taxes, and which would I put on my Father-in-law's taxes?



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Old 03-27-2018, 01:47 AM
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Join Date: Oct 2010
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An accountant told me that I would be able to use 40% of the purchase value of the boat as the basis for depreciation on my taxes, and my father in law could use the other 60% depreciation on form 4562.=======>agreed since your portion of the ownership of the boat is 40% while his is 60%;

My question has to do with the Schedule E, Type of Property. I guess my choices are 7-Self Rental and 8-Other. Which would I put on my taxes, and which would I put on my Father-in-law's taxes?=======>you/your father in law may check 7-self rental since you rent property to the business of C corp in which you materially participated. each of you needs to file sch E of 1040 to report the rent related income and expenses ; I mean since the C corp is renting the boat for biz purposes from you, the biz reports the rent paid as exp on its 1120 and you report the rental income/expense etc. on your/your father in law?s own tax return of 1040.



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