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I am an F-1 student who subleased my apartment last summer while on OPT. I have read that F-1 students are allowed to receive limited passive income, but I am unsure whether income from subleasing is considered passive income, similar to rental income.

A lawyer I consulted mentioned that F-1 students are not allowed to receive any income, and subleasing at a higher rate than my original rent could potentially violate this rule. This has left me with several questions:

  1. Is sublease income considered passive income for F-1 students? Does it require tax reporting?
  2. What factors determine whether income is considered active or passive? Is it based on the nature of the income or the amount?
  3. Does subleasing at a higher rate than my original rent disqualify the income from being considered passive?
nano
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1 Answers1

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A lawyer I consulted mentioned that F-1 students are not allowed to receive any income

IANAL, but that doesn't sound right.

Is sublease income considered passive income for F-1 students? Does it require tax reporting?

It's definitely income and should be reported on your tax return. Depending on the circumstances it may be taxable (depending on what you can, if at all, deduct from it as an eligible expense).

What factors determine whether income is considered active or passive? Is it based on the nature of the income or the amount?

Passive or active nature of activity depends on the specifics of the activity. Long term rentals are generally considered passive, while short term rentals with hotel-like services (aka AirBNB) are generally considered active. You'll need to determine, based on your specific facts and circumstances, where you fall on that range. See the IRS Publication 925.

Does subleasing at a higher rate than my original rent disqualify the income from being considered passive?

No, generally passive investments are still investments and are intended for profit.

littleadv
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