MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Subleasing Your Workspace

14 Feb 2023 · 1 min

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This content was created by MARK KOHLER. This content was uploaded by MARK KOHLER. This is a YouTube video titled "Subleasing Your Workspace" (created 2023-02-14T23:56:53+00:00). It is a short Q&A-style conversation between an asker (labeled SPEAKER A) and tax expert MARK KOHLER. The discussion covers the tax treatment of subleasing a workstation in a co‑working space—deducting the primary rent, reporting sublease income (e.g., on Schedule E), S Corp reporting options, and ensuring the income is not subject to self‑employment (SE) tax.

Chapters

Is subleasing out suite spaces in a co working space considered operational income?
All right, they're renting a commercial space in their business and then they're subletting out a workstation to someone else. That is leasing income. You are subletting the space you're already renting. So you get to write off the total rent that you're paying on your operational business for that space. Then on a separate form you're going to show rental income on a Schedule E. I guess you could claim it on the S Corp itself, but make sure it's not classified ordinary income subject to se, that it's just rental income. So your accountant could maybe carve that rent out on another return. They could also put that rent on the S Corp. But we don't want it subject to SE tax. It's going to be ordinary in the sense that it's subject to your ordinary rate, but we definitely don't want it subject to self employment tax. So you get to write off the main rent you're paying and then you got to claim the subleasing income. Let's just make sure it's on the right form and classified as not subject to self employment tax.