Subleasing your business office space

[Manuel Lam]

Hi, I have a consulting business (professional Corp). I pay $600 to lease my office. It turns out that it is common practice to sublease other days to offset my lease. I sublease at $250/day in this market. So I can get positive cash flow on leasing if I sublease three days, which I have. So I have active income where I see clients. I have a rent expense, and I have income from subleasing (passive income?) my question: is the passive income is separate from my (active) consulting business? So it’s a completely different business in itself (sole proprietor?) Should I deposit the passive income into a different account or can I deposit into the same account or is that considered commingling? Is it a schedule E? Seems like a hassle to organize it separately but I see the tax advantages. Kinda want to just clump it together... Also... can I invest the business income into funds that give a dividend (like ahpfund), or will the earnings be taxed as ordinary? Or is it better to pay yourself and then invest from personal account? Advantages and disadvantages? Thanks for your insight.