Answers · Individual tax · Form 1040
What Is Schedule E?
Schedule E reports rental/royalty activity and many partnership/S corporation pass-through items.
How it works
The rule, and what it turns on.
K-1 items retain their character and rental losses can be limited by basis, at-risk and passive-activity rules.
Example
An S corporation K-1 can show ordinary business income and separately stated charitable contributions that flow to different return lines.
Common mistakes
What we see go wrong, and what we do instead.
- Netting all K-1 boxes together.
- Ignoring suspended passive losses.
A better approach
- Maintain basis/passive-loss schedules year to year.
Authority
Where this comes from, so you can check it.
IRC §§61(a)(5), 162, 167, 168, 469 and 280A; Schedule E instructions; IRS Publication 527.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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