Per IRS Publication 525 Taxable and Nontaxable Income, page 16:

If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is generally determined by:

• Whether or not the rental activity is a business, and
• Whether or not the rental activity is conducted for profit.

Reporting nonbusiness income.

If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. List the type and amount of the income on the dotted line next to line 21.

Reporting nonbusiness expenses.

If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Also, enter the amount and PPR on the dotted line next to line 36. If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income.

To report the income and related expenses using TaxACT, enter a description and an amount for Line 21 of IRS Form 1040:

1. From within your TaxACT return (Online or Desktop), click on the Federal Q&A tab
2. Click Other Income to expand the category and then click Rental income from personal property
3. Enter your income from personal property rental in the field on the following screen

When you print your return, the text See Attached will print to the left of Line 21 on Form 1040. An attached sheet titled Other Income will print with the amount on Line 8 Income from personal property rental.

To enter the expenses for personal property rental:

1. From within your TaxACT return (Online or Desktop), click on the Federal Q&A tab
2. Click Other Adjustments to expand the category and then click Other Adjustments
3. Enter the information in the box for Expenses for personal property rental
4. TaxACT will print "PPR" on Line 36 next to this amount.

(IMPORTANT: per Pub. 525 above, do not claim expenses greater than the the rent received, as those losses will not be allowed.)

Note: If this text is applicable to your return (determined by the information entered) the TaxACT program will automatically place the text in the correct location on the return. The text will appear on the printed (or print previewed) form, but is not visible on the screen view of the form (only available to users of the Desktop version of the program).