A Schedule E is used to report supplemental income or loss from rental real estate, royalties, partnerships, S corporations, estates and trusts.
This is where you will be reporting:
- Income from 1120S (or 1065) K-1
- Rental Properties Income
It includes sections for reporting income or loss from each of these sources. The total income or loss is then used to adjust the gross income on the main 1040 tax form.
Here are the most important sections of form Schedule E
PART 1 Income or Loss From Rental Real Estate and Royalties:
Line 1a Physical Address of Rental (Can list up to 3 properties per page)
Line 3 Rents received (gross income from the rental properties)
Line 20 Total expenses on each one of the rental properties detailed above. Each rental will be recorded on a separate column.
Line 26 Total rental real estate and royalty income or (loss). This will be the calculation of line 3+4 minus line 20.
PART 2 Income or Loss From Partnerships and S Corporations:
Line 28 K-1s listed from each entity: As an S Corp owner, part of your income is reported on your W-2 (your payroll) while the other part is reported on form K-1. Schedule E line 28 is where you record your K-1 income. Line 28 will show you detailed income per source.
Line 32 Total partnership and S corporation income or (loss)
PART 5
Line 41 Total income or (loss) The Result from here is entered on the Schedule 1
