Rental Income taxed differently than regular income?

[Peter Richardson]

Hi all,

I'm trying to get a decisive answer on this: does the income you make from renting out gear (camera, editing suite etc) get taxed at a different rate than income you make from your labor? I have had friends in the film business tell me yes, but an accountant (who wasn't film savvy) tell me no. Anyway have an idea?

Thanks!

Peter

 

[Macville]

Are you talking about US Federal Taxes? If so, then I would say your accountant is correct. I've been running a video production business for three years and have never paid a different rate for my rental equipment. The only thing I am aware of is is capital gains/dividends. But don't take my word for it. There is probably small print somewhere in the tax code that makes rental gear taxed at a different rate each time you rent gear out (I jest, but the code is almost that absurd.) Ask another accountant for their opinion. I'm betting they will agree with your accountant.

Matthew

 

[pixelated]

Rental gear income can be partially offset by things such as the cost of preparation and cleaning and depreciation since its a business asset. Rental gear may also be eligible for a faster rate of depreciation. There's probably more - this is just off the top of my head.