What is Schedule E?
If you own rental property or have other sources of income from real estate investments, you may be familiar with Schedule E. Here’s what you need to know about this tax form.
Schedule E is a tax form used to report income and expenses from rental real estate, royalties, partnerships, S corporations, estates, and trusts. The form is used to calculate the net income or loss from these sources, which is then reported on your individual tax return.
You are required to file Schedule E if you have any of the following types of income:
- Rental income from real estate
- Partnership income
- S corporation income
- Estate or trust income
Reporting Income and Expenses
On Schedule E, you will report your income and expenses for each rental property or real estate investment. This includes rental income, mortgage interest, property taxes, insurance, repairs, and other expenses related to the property. The net income or loss from each property is then totaled and reported on your tax return.
Passive Activity Rules
If you have a net loss on Schedule E, it may be subject to the passive activity loss rules. These rules limit the amount of losses that can be deducted from your other sources of income, such as wages or salaries. Consult a tax professional for more information on these rules.
Schedule E is an important tax form for anyone who earns income from rental real estate, royalties, partnerships, S corporations, estates, and trusts. Make sure you are aware of the filing requirements and report all of your income and expenses accurately.