What is difference between Rental or Business Income?

Sometime it is difficult to determine whether rental income is from property or from the business. The most important factors in determining income source are the number and kinds of services you provide for your tenants. It is property income if you are earning income from a property by renting space and providing basic services which only includes heat, light, parking and laundry services. If you provide additional services to tenants such as cleaning, security, and meal then you may be carrying on business. Bottom line is, the more services you provide, the greater the chance that the rental operation is a business.