PA State Tax - For-Profit property

Forum|Forum|11 months ago
April 13, 2025
1 reply
0 views

Hi, using Turbo Tax Premier, and I own a rental property. When doing the Pennsylvania taxes, Turbo Tax asks if this is a for-profit property, and Turbo Tax help offers the text below, but it's not clear if the listed three conditions ALL have to be true (meaning, 1 AND 2 AND 3), or if ANY of them are true (meaning, 1 OR 2 OR 3). Numbers 1 AND 2 apply to me. 3 doesn't.

For-Profit Rental Property

Your rental is considered a for-profit (business activity) rental when:

1) You offer the use of your property with the intention of making a profit.

2) You lease your property continually, not for limited periods of time during the year.

3) You offer your property on a commercial basis to others and at least one of the following applies:

- The average period of customer use is 30 days or less
- The property is made available for use only during defined business hours
- You provide significant services (i.e. housekeeping, room service, valet parking, transportation services) to your tenants
- You incur significant operating expense in making the property available for lease
- The leasing activity is incidental to a real estate sales business

Thanks!

DianeW777

No, they don't all have to be true. Each of the three notices is asking if your are renting with the intent to make money. If you meet one of them you can select that it is a 'for profit property. This doesn't mean that you must have an overall net profit, but it does mean you are renting your property at fair rental value (FRV).

Fair Rental Value:

This means the rent being charged is what would be charged in the area of the rental for the same type of property. In other words, the price that a property could reasonably be expected to rent for in the current market.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"