Article: 50250
Overview
Schedule E (Form 1040) is used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in Real Estate Mortgage Investment Conduits (REMICs).
Add Schedule E
To add the Schedule E
- Go to Federal Taxes.
- Click Review.
- Click I’d like to see the forms I’ve filled out or search for a form.
- Enter Rent in the search box and click on Schedule E – Rental Income and Royalty Income to add and open the form.
- Enter your information and click Save.
Fair Rental vs. Personal Use Days
A common error when completing Schedule E is entering an invalid combination of fair rental days and personal use days — these two entries combined cannot exceed 365 days.
This issue often arises when you live in a home and rent out only a portion of it. In this case, look for the question “Was this rental property a multi-occupancy unit, like a duplex, where you occupied one of the units?” just below the fair rental days entry.
Answering “Yes” allows you to identify which part of the property you occupy and treat the non-occupied portion as a separate unit, assigning it a full-year fair rental use.
Depreciation Information
To add depreciation information for a Schedule E property, first add the property itself on Schedule E. Then, add the depreciation screen. When asked what type of property is being depreciated, answer “No” until you reach the “Real Estate Rental” question. Answering “Yes” will bring up a list of your Schedule E properties. Select the appropriate one to link depreciation to it.
de Minimis Safe Harbor Information
To make a §1.263(a)-3(h) “de minimis safe harbor” election for a Schedule E property, you must first link the property to your Form 4562 (Depreciation Deduction). Add the depreciation screen and answer “No” until you reach the “Real Estate Rental” question. Answer “Yes” to view and select the applicable property.
Next, while still in the “Your Depreciation Deduction” screen, scroll to the bottom and click “Show me the uncommon items.” Under the section labeled “Section 1.263(a)-3(h),” check the box for “Building qualifies for Section 1.263(a)-3(h) election,” then save the form.
Further Information
- About Schedule E
- Instructions for Schedule E
- Publication 225
- Publication 334
- Publication 463
- Publication 527
- Publication 541
- Publication 544
- Publication 925
- Publication 946
- Publication 1544