Schedule E (Form 1040) is used to report Supplemental Income and Loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs).
Taxpayers use Schedule E to report rental income and deduct allowable expenses related to operating their rental properties, such as mortgage interest, property taxes, maintenance costs, and depreciation, to calculate their net rental profit or loss for the tax year. This net amount is then transferred to their individual income tax return (Form 1040).
Objectives
After completing this chapter, you will be able to:
- Identify the types of income reported on Schedule E
- Distinguish between repairs and improvements for tax purposes
- Locate and use the rental property depreciation chart to determine appropriate depreciation periods
- Determine the holding periods for different types of property
- Explain the difference between short-term and long-term capital gains
- Identify what qualifies as a capital asset
Field of Study: Federal Tax Law — 2 Hours
Course Level: Intermediate
Prerequisite: General tax preparation knowledge is required
Delivery Method: Self-Study Expiration
Expiration Date to earn CEs: July 30, 2027.
* This course does not qualify for California CTEC continuing education credit. It counts for federal (IRS) CE only and will be reported to your PTIN account.