- The image displays IRS Schedule E, used for reporting income or loss from rental real estate and royalties.
- It requires the taxpayer to provide general property information, including description, address, and type (e.g., single-family, multi-family, vacation rental).
- The form asks for the number of days the property was rented and used for personal use, which affects how expenses are allocated.
- It includes checkboxes to indicate if the property is a main/second home, was disposed of in 2020, owned as a qualified joint venture, or if payments over $600 were made to non-employees.
- Income sections capture rent income and royalties for the year 2020.
- Expense sections are divided into “Rental unit expenses” and “Rental and homeowner expenses,” with specific line items like advertising, mortgage interest, repairs, taxes, utilities, and depreciation.
- Instructions clarify that for multi-unit dwellings where the taxpayer lives in one unit, only rental-related expenses go in the “Rental unit expenses” column; homeowner expenses apply to the entire property.
- If the property is not multi-unit and the taxpayer lives in it, only the “Rental unit expenses” column should be completed.
Parent Tip: Review the logic above to help your child master the concept of schedule e worksheet.
