Free Tax Course

Reporting Rental Income and Expenses

Schedule E

If you rent out buildings, rooms or apartments, and provide only heat and light, trash collection, etc. you normally report your rental income and expenses in Part I of Schedule E. However, do not use Schedule E to report a not for profit activity.

Schedule C

If you provide significant services that are primarily for your tenant's convenience such as regular cleaning, changing the linens or main service, you report your rental income and expenses on Schedule C.

Reporting rental income and expenses on Schedule E

Use Part I of Schedule E to report your rental income and expenses. If you have more than three rental properties, complete and attach as many Schedule E as are needed to list the properties.

Complete lines 1 and 2 for each property. However, fill in the totals column on only one Schedule E. The figures in the totals column of that Schedule E should be the combined totals of all Schedule E.

On page 1, line 20 of Schedule E, enter the depreciation you are claiming.

IRS form 4562

You must complete and attach a Form 4562 for rental activities only if you are claiming:

  • depreciation on property placed in service in the current tax year
  • depreciation on any property that is listed property, such as a car or certain computer equipment
  • any car expenses (actual or the standard mileage rate)

Otherwise, figure depreciation on your own worksheet which does not have to be attached to your tax return.



Looking for more IRS Deductions?