The IRS has specific rules regarding the tax treatment of the rental of personal property, including whether the activity is a business. "Personal property" may include things like heavy equipment, moving supplies, and more.

Most tax practitioners automatically think of Schedule E when considering rentals. IRS insists ONLY REAL ESTATE RENTALS belong on Schedule E. For rental of PERSONAL PROPERTY, IRS gives two different sets of instructions:

If a taxpayer is in the trade or business of renting, the rental belongs on Schedule C. This would apply to most equipment rental operations (a similar rule applies to hotels and motels). The income from the activity is subject to SE tax and belongs on Schedule C. Whether the activity is passive or not depends upon the taxpayer’s participation. If the taxpayer is a material participant, this is not a passive activity. If taxpayer is more of an investor, then it’s passive.

It is possible for the activity to fit this category.  Look at the taxpayer’s level of services rendered, prior experience with such business activities, whether the taxpayer deals with the general public rather than a single client, and so on.  With this type of rental activity, and provided it is done with a profit motive, IRS instructions for 2021 returns say that for the rental of personal property engaged in for profit where the taxpayer wasn’t in the business of renting such property to claim the income on Form 1040 Schedule 1, Part I, line 8k) and associated deductible expenses (on Schedule 1, Part II, line 24b. The IRS does not make it clear whether they consider this income passive.  It is easy to argue this is less an activity than an investment.  One unconfirmed view is that this is a “portfolio” item that eliminates the use of Form 8582 and classifies the income as “non-business income” for purposes of calculating a Net Operating Loss.