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?