Subleasing your business office for income.

5 Replies

I have a consulting business (professional corp).  I pay $600 to lease my office (cheap i know). It turns out that it is common practice to sublease other days to offset my lease.  I sublease at $250/day.  So i can get positive cash flow on leasing if I sublease at three days.  

I have active income where I see clients.  I have a rent expense.  I have income from subleasing (passive income).  Is the subleasing passive income separate from my active consulting business?  i.e.  It's a different business in itself, and I would file it as a schedule E? as a sole proprietor?  Should I deposit the passive income into a different account or is that considered commingling?  Seems like a hassle to organize it separately but I see the tax advantages.  Kinda want to just clump it together.  It can offset some business expenses, and it doesn't look like I need to work as hard. 

What are your thoughts?

Please do not post the same question to 3 different places!!!!! Drives me crazy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@Manuel Lam

Don't overcomplicate it. Keep everything under your consulting business and then either

a. treat your "rent income" as an offset of your rental expense. In other words, if you paid $7,200 per year in rent and received $6,000 from subleasing, then you simply had $1,200 rent expense.

b. or you can treat $6,000 as business income, with the same end result.

@Curt Davis Sorry!  I didn't realize I posted three times... because there were errors when i posted initially.  more than happy to take extra posts down. 

@Michael Plaks   I have subleasing income in excess of my rent expense.  Doubled.  So I actually have an extra 500$ per month.    If it were less... i would have deducted it yes.  

Originally posted by @Manuel Lam :

@Michael Plaks   I have subleasing income in excess of my rent expense.  Doubled.  So I actually have an extra 500$ per month.    If it were less... i would have deducted it yes.  

Then option B - treat as business income. 

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