Posted by William Bronchick on March 29, 2000 at 09:12:52:
The 10% fee is to the corporation. Your corporations has expenses, which should zero it out.
Tax Experts or Veteran landlords ! Schedule C + Schedule E ? - Posted by Millie I.
Posted by Millie I. on March 28, 2000 at 18:52:05:
In the past, all my rental properties expenses were put on Schedul E, and my office and management expenses were distributed amoungst all the properties.
This year, the tax preparer is putting all the properties expenses on the schedule E, and all the management expenses on a schedule C under my name.
My tax preparer is a tax professor at a law school, but he is not a real estate investor.
Do you see any issues in this way of reporting? Comments any professional or veteran landlords?
Thanks,
Millie I.
Yikes! Never file schedule “C”! - Posted by William Bronchick
Posted by William Bronchick on March 28, 2000 at 21:51:28:
The IRS loves to audit schedule C returns. In fact, I read one of the auditor’s handbooks which tells IRS auditors to look exactly for such a thing!
Better solution - form a C corporation to manage your properties in exchange for 10% of the gross rents (standard in the rental industry). Then offset the corporation’s income with all of your “office” expenses and trips to Las Vegas to attend my seminars 
Re: Yikes! Never file schedule “C”! - Posted by Laure
Posted by Laure on March 29, 2000 at 07:18:19:
Bill, I have a new C corp this year. When you take the 10% as a management fee, do you have to pay as an employee, or sub-contractor?
BTW, you gave me the courage to try my own taxes this year. Am using Turbo Tax for business. GEEZ, this ain’t that hard !
Thanks,
Laure
Re: Yikes! Never file schedule “C”! - Posted by Millie I
Posted by Millie I on March 29, 2000 at 24:17:31:
Thanks Bill,
I thought there was somthing wrong about using schedule C, just didn’t remember what it was. I am sure glad I asked. You are a life saver!
I have been thinking of your seminar a lot lately. Love to come to one, but just can’t get away at this time, however, I will definately see you in Chicago in May at the Chicago Real Estate Association.
Maybe you should have a seminar in Chicago. There are close to 10 or more REI groups there. Investors come from at least 4 states to attend the monthly meeting. If you have the seminar there, I will definately attend with my husband. We will bring the N.W. Indiana RE crowd with us.
See you in May,
Millie I.
Your corporation is not an employee - Posted by Branden
Posted by Branden on March 29, 2000 at 09:19:01:
Your corporation acts as a subcontractor. You need to separate yourself from your corporation. It’s no different than hiring a property management company to manage your properties, except you happen to control the management company.