Renting For Filming

Today TaxMama hears from York in the TaxQuips Forum, who has found an interesting income source. “We just received our first contract for our 1916 home to be used for a commercial.

The shoot lasts 3 days and we will receive $9,000 – cool! It seems that the IRS (and somewhere on your site) state that income from renting out our home for fewer than 15 days a year entitles us to NOT have to claim this as income… very cool.

Then he has several questions

Hi York,

 Congratulations!  That’s a terrific opportunity.  Yes, the income is tax-free to California, as well.  After all, the film industry is based in ‘Hollywood’. In fact, when the Olympics were here, in Los Angeles, I helped a client build an entire business around that 2-week-free concept.

 When or if you get the 1099, you will report it as income. Then you will deduct it back out with an explanation that the residence was rented for less than 15 days.

How can you do this in TurboTax?
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I haven’t a clue.  But you can ask customer service to help you. They will know how to make the entries.

 As to taking deductions for improvements? Sorry, York. That’s not an option.   After all, remember, this is tax-free income.  However, you would be wise to track all the costs and save all the receipts. When you sell the house, or turn it into a full-time or frequent rental, those costs will come into play.

 But…remember, the exclusion from income for renting the house for less than 15 days is for 14 days TOTAL during the year. Not 14 days at a time. Once you’ve rented the house for 15 days, ALL the income becomes taxable. So be very careful to count the days.

 If you are planning to make improvements to your home to attract more rentals, all of your income will become taxable on Schedule E.  Then, of course, you’ll be able to either deduct the improvements or depreciate them.  

When that happens, I’d advise you to work with a tax professional to set this all up properly and to give you guidance on how to maximize your profits from working with the studios. There are some non-tax-related tricks for those who know.

And remember, you can find answers to all kinds of questions about renting your home to the studios and other tax issues, free. Where? Where else? At

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