SCH E (1040), Supplemental Income and Loss

Info

Panel

bgColor	#E3FCEF

This article demonstrates how to complete SCH E for a rental or royalty.

Keep in mind every SCH E is different, so these instructions are not all inclusive and may not apply to every taxpayer.

...

About SCH E

Taxpayers use SCH E to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interest in real estate mortgage investment conduits (REMICs).

All applicable SCH E Due Diligence Documents must be completed prior to entering ANY information on SCH E.

...

Completing SCH E

...

Select Add Form.
Image Removed
Begin by typing SCH E, into the search bar at the bottom of the All Forms and Schedules Menu.
Select Form SCH E PG 1 . Image Added
Locate and highlight SCH-E in the All Forms & Schedules Menu. Double-click to add the form.
Image Removed
Complete Part I-Income or Loss From Rental Real Estate and Royalties.
- When completing SCH E each rental or royalty will be assigned a different letter. If there are more than three rentals or royalties add another SCH E occurrence.
  - For rentals, all lines must be completed in Part I.
  - For royalties, most information will autofill after you choose royalty as the property type (6).
    Image Removed
Complete the income section as needed. Allocating
1. Enter the property type code first. For a list of property types select Choices. If chose property type “6” for royalties skip to step 3F.
2. Repeat this process for additional properties on lines B and C.
  Image Added
3. Complete the address section in “A”.
  Image Added
4. Enter the number of days rented.
  Image Added
5. Enter personal use days (if applicable).
  Image Added
6. Enter the QBI indicator.
  Anchor
  3F
  3F
  Image Added
Complete the Income section. Allocate income to the appropriate property/royalty A, B, or C.
1. If the taxpayer has linked 1099 forms, this income will be displayed on 3a (rents) or 4a (royalties) as shown.
Image Removed
1. Image Added
2. If the taxpayer has rent or royalty payments not reported on 1099 forms, enter this income into 3a (rents) or 4a (royalties).
Image Removed
Complete the expense section as needed. Allocating
1. Image Added
If the taxpayer has expenses, complete the Expense section. Allocate expenses to the appropriate property/royalty A, B, or C.
Image RemovedImage Added