Formulár 1040 Plán E Pokyny
Pokyny pre plán E (Form 1040 alebo formulár 1040-SR), Doplnkový príjem a straty
Rev. 2023
Súvisiace formuláre
- Formulár 1040 Rozpis E - Doplnkový príjem a strata
Department of the Treasury
Internal Revenue Service
2023 Instructions for Schedule E
Use Schedule E (Form 1040) to report income or loss from rental real estate, royalties,
partnerships, S corporations, estates, trusts, and residual interests in REMICs.
Supplemental
You can attach your own schedule(s) to report income or loss from any of these
sources. Use the same format as on Schedule E.
Income and Loss
Enter separately on Schedule E the total income and the total loss for each part. En-
close loss figures in (parentheses).
Section references are to the Internal Revenue Code unless
otherwise noted.
found in the Shareholder’s Instructions for Schedule K-1 (Form
1120-S).
Future Developments
General Instructions
For the latest information about developments related to Sched-
ule E (Form 1040) and its instructions, such as legislation enac-
Other Schedules and Forms You May Have
To File
Schedule A (Form 1040) to deduct interest, taxes, and
casualty losses not related to your business.
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What's New
Form 461 to report an excess business loss.
Form 941 to report the employer share and employee
share of social security tax and Medicare tax, withheld federal
income tax, and, if applicable, withheld Additional Medicare
Tax.
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Standard mileage rate. The standard mileage rate for miles
driven in connection with your rental activities increased to
65.5 cents a mile for 2023.
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Business meals expense. The temporary 100% deduction for
food or beverages provided by a restaurant has expired. The
business meal deduction reverts back to the previous 50% al-
for more information.
Form 944 for smallest employers (those whose annual
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liability for social security, Medicare, and withheld federal
income taxes is $1,000 or less) to file and pay these taxes only
once a year instead of every quarter.
Form 1041 to report information for estates and trusts.
Form 3520 to report certain transactions with foreign
trusts and receipt of certain large gifts or bequests from certain
foreign persons.
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Reminders
Form 4562 to claim depreciation and amortization
Form 7205, Energy Efficient Commercial Buildings Deduc-
tion. This form and its separate instructions are used to claim
the section 179D deduction for the cost of energy efficient
commercial building property and energy efficient building ret-
rofit property placed in service during the tax year.
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(including information on listed property) on assets placed in
service in 2023, to claim amortization that began in 2023, to
make an election under section 179 to expense certain property,
or to report information on listed property.
Form 4684 to report a casualty or theft gain or loss
involving property used in your trade or business or
income-producing property.
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Excess business loss limitation. If you report a loss on
line 26, 32, 37, or 39 of your Schedule E (Form 1040), you
may be subject to a business loss limitation. The disallowed
loss resulting from the limitation will not be reflected on
line 26, 32, 37, or 39 of your Schedule E. Instead, use Form
461 to determine the amount of your excess business loss,
which will be included as income on Schedule 1 (Form 1040),
line 8p. Any disallowed loss resulting from this limitation will
be treated as a net operating loss that must be carried forward
and deducted in a subsequent year.
Form 4797 to report sales, exchanges, and involuntary
conversions (not from a casualty or theft) of trade or business
property.
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Form 6198 to apply a limitation to your loss from an
at-risk activity.
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Form 7203 to figure potential limitations of your share of
the S corporation's deductions, credits, and other items that can
be deducted on your return.
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See Form 461 and its instructions for details on the excess
business loss limitation.
Form 7205 to claim the deduction for the cost of energy
efficient commercial building property and energy efficient
building retrofit property placed in service during the tax year.
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Figuring a shareholder’s stock and debt basis. See Form
7203 and its separate instructions, which have been developed
to replace the 3-part Worksheet for Figuring a Shareholder’s
Stock and Debt Basis and its related instructions formerly
Form 8082 to notify the IRS of any inconsistent tax
treatment for an item on your return.
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Form 8582 to apply a limitation to your loss from passive
activities.
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Cat. No. 24332T
Aug 17, 2023
Form 8824 to report like-kind exchanges.
Form 8826 to claim a credit for expenditures to improve
access to your business for individuals with disabilities.
as separate properties on line 1 of Schedule E. On lines 3
through 22 for each separate property interest, you must enter
your share of the applicable income, deduction, or loss.
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Form 8873 to figure your extraterritorial income
exclusion.
Form 8960 to pay Net Investment Income Tax on certain
income from your rental and other passive activities.
Form 8990 to determine whether your business interest
deduction is limited.
Form 8995 or 8995-A to claim a deduction for qualified
business income.
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If you have more than three rental real estate or royalty
properties, complete and attach as many Schedules E as you
need to list them. But fill in lines 23a through 26 on only one
Schedule E. The figures on lines 23a through 26 on that Sched-
ule E should be the combined totals for all properties reported
on your Schedules E.
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Once made, the election can be revoked only with the per-
mission of the IRS. However, the election technically remains
in effect only for as long as the spouses filing as a QJV contin-
ue to meet the requirements to be treated as a QJV. If the spou-
ses fail to meet the QJV requirements for a year, a new election
will be necessary for any future year in which the spouses meet
the requirements to be treated as a QJV.
Single-member limited liability company (LLC). In most
cases, a single-member domestic LLC is not treated as a sepa-
rate entity for federal income tax purposes. If you are the sole
member of a domestic LLC, file Schedule E (or Schedule C or
F, if applicable). However, you can elect to treat a domestic
LLC as a corporation. See Form 8832 for details on the elec-
tion and the tax treatment of a foreign LLC.
Rental real estate income is generally not included in net
earnings from self-employment subject to self-employment tax
and is generally subject to passive loss limitation rules. Elect-
ing QJV status does not alter the application of the self-em-
ployment tax or the passive loss limitation rules.
Information returns. You may have to file information re-
turns for wages paid to employees, certain payments of fees
and other nonemployee compensation, interest, rents, royalties,
real estate transactions, annuities, and pensions. For details, see
Line A, later, and the 2023 General Instructions for Certain In-
formation Returns.
Reportable Transaction Disclosure
Statement
If you received cash of more than $10,000 in one or more
related transactions in your trade or business, you may have to
file Form 8300. For details, see Pub. 1544.
Use Form 8886 to disclose information for each reportable
transaction in which you participated. Form 8886 must be filed
for each tax year that your federal income tax liability is affec-
ted by your participation in the transaction. You may have to
pay a penalty if you are required to file Form 8886 but do not
do so. You may also have to pay interest and penalties on any
reportable transaction understatements. The following are re-
portable transactions.
Qualified Joint Venture (QJV)
If you and your spouse each materially participate (see Materi-
al participation in the Instructions for Schedule C) as the only
members of a jointly owned and operated rental real estate
business and you file a joint return for the tax year, you can
elect to be treated as a QJV instead of a partnership. This elec-
tion, in most cases, will not increase the total tax owed on the
joint return. By making the election, you will not be required to
file Form 1065 for any year the election is in effect and will in-
stead report the income and deductions directly on your joint
return. If you and your spouse filed Form 1065 for the year pri-
or to the election, the partnership terminates at the end of the
tax year immediately preceding the year the election takes ef-
fect.
Any listed transaction that is the same as or substantially
similar to tax avoidance transactions identified by the IRS.
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Any transaction offered to you or a related party under
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conditions of confidentiality for which you paid an advisor a
fee of at least $50,000 for individuals or $250,000 for partner-
ships and trusts. See the Instructions for Form 8886.
Certain transactions for which you or a related party have
contractual protection against disallowance of the tax benefits.
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Certain transactions resulting in a loss of at least $2 mil-
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lion in any single tax year or $4 million in any combination of
tax years (at least $50,000 for a single tax year if the loss arose
from a foreign currency transaction defined in section 988(c)
(1), whether or not the loss flows through from an S corpora-
tion or partnership).
Note. Mere joint ownership of property that is not a trade or
business does not qualify for the election.
Only businesses that are owned and operated by spou-
ses as co-owners (and not in the name of a state law
entity) qualify for the election. Thus, a business owned
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CAUTION
Certain transactions of interest entered into that are the
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and operated by spouses through an LLC does not qualify for
the election of a QJV.
same as or substantially similar to transactions that the IRS has
identified by notice, regulation, or other form of published
guidance as transactions of interest.
Making the election. To make this election for your rental re-
al estate business, check the “QJV” box on line 2 for each
property that is part of the QJV. You must divide all items of
income, gain, loss, deduction, and credit attributable to the
rental real estate business between you and your spouse in ac-
cordance with your respective interests in the venture. Al-
though you and your spouse will not each file your own Sched-
ule E as part of the QJV, each of you must report your interest
See the Instructions for Form 8886 for more details.
Limitation on Losses
If you report a loss from rental real estate or royalties in Part I,
a loss from a partnership or S corporation in Part II, or a loss
from an estate or trust in Part III, your loss may be reduced or
E-2
not allowed this year. You must apply the following rules to
your loss.
Qualified nonrecourse financing. Qualified nonrecourse fi-
nancing is treated as an amount at risk if it is secured by real
property used in an activity of holding real property subject to
the at-risk rules. Qualified nonrecourse financing is financing
for which no one is personally liable for repayment and is:
Basis rules apply to losses from a partnership or S
for S corporations, later, in Part II.
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At-risk rules apply to losses from rental real estate or
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Borrowed by you in connection with the activity of hold-
ing real property (other than mineral property);
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royalties. They also apply to losses from a partnership, S
General Instructions. If the loss is from a partnership or S
Not convertible from a debt obligation to an ownership
interest; and
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Loaned or guaranteed by any federal, state, or local gov-
ernment, or borrowed by you from a qualified person.
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Passive activity loss rules apply to losses from rental real
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estate. They also apply to losses from a partnership, S
later, in the General Instructions. If the loss is from a
partnership or S corporation, also see Passive activity loss
rules, later, in Part II.
Qualified person. A qualified person is a person who ac-
tively and regularly engages in the business of lending money,
such as a bank or savings and loan association. A qualified per-
son cannot be:
Related to you (unless the nonrecourse financing obtained
is commercially reasonable and on substantially the same terms
as loans involving unrelated persons),
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Excess business loss rules apply to losses from all
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noncorporate trades or businesses. This loss limitation is
figured using Form 461 after you complete your Schedule E.
Any limitation to your loss resulting from these rules will not
be reflected on your Schedule E. Instead, it will be included as
income on Schedule 1 (Form 1040), line 8p, and treated as a
net operating loss that must be carried forward and deducted in
a subsequent year. These rules also apply to losses from a
partnership or S corporation.
The seller of the property (or a person related to the sell-
er), or
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A person who receives a fee due to your investment in re-
al property (or a person related to that person).
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More information. For more details about the at-risk rules,
see the Instructions for Form 6198 and Pub. 925.
At-Risk Rules
Passive Activity Loss Rules
In most cases, you must complete Form 6198 to figure your
loss if you have:
The passive activity loss rules may limit the amount of losses
you can deduct. These rules apply to losses in Parts I, II, and
III, and line 40 of Schedule E.
A loss from an activity carried on as a trade or business
or for the production of income, and
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Losses from passive activities may be subject first to the
at-risk rules. Losses deductible under the at-risk rules are then
subject to the passive activity loss rules.
Amounts in the activity for which you are not at risk.
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The at-risk rules in most cases limit the amount of loss (in-
cluding loss on the disposition of assets) you can claim to the
amount you could actually lose in the activity. However, the
at-risk rules do not apply to losses from an activity of holding
real property placed in service before 1987. They also do not
apply to losses from your interest acquired before 1987 in a
pass-through entity engaged in such activity. The activity of
holding mineral property does not qualify for this exception.
You can deduct losses from passive activities in most cases
only to the extent of income from passive activities. An excep-
tion for certain rental real estate activities (explained later) may
apply.
Passive Activity
A passive activity is any business activity in which you did not
materially participate and any rental activity, except as ex-
plained later. If you are a limited partner, in most cases, you are
not treated as having materially participated in the partnership's
activities for the year.
In most cases, you are not at risk for amounts such as the
following.
Nonrecourse loans used to finance the activity, to acquire
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property used in the activity, or to acquire your interest in the
activity that are not secured by your own property (other than
property used in the activity). However, there is an exception
for certain nonrecourse financing borrowed by you in connec-
tion with the activity of holding real property (other than min-
The rental of real or personal property is a rental activity un-
der the passive activity loss rules in most cases, but exceptions
apply. If your rental of property is not treated as a rental activi-
ty, you must determine whether it is a trade or business activity
and, if so, whether you materially participated in the activity
for the tax year.
Cash, property, or borrowed amounts used in the activity
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(or contributed to the activity, or used to acquire your interest
in the activity) that are protected against loss by a guarantee,
stop-loss agreement, or other similar arrangement (excluding
casualty insurance and insurance against tort liability).
See the Instructions for Form 8582 to determine whether
you materially participated in the activity and for the definition
of “rental activity.”
Amounts borrowed for use in the activity from a person
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See Pub. 925 for special rules that apply to rentals of:
who has an interest in the activity (other than as a creditor) or
who is related under section 465(b)(3)(C) to a person (other
than you) having such an interest.
Substantially nondepreciable property,
Property incidental to development activities, and
Property related to activities in which you materially par-
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ticipate.
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Activities That Are Not Passive Activities
Exception for Certain Rental Real Estate Activities
If you meet all of the following conditions, your rental real es-
tate losses are not limited by the passive activity loss rules, and
you do not need to complete Form 8582. If you do not meet all
of these conditions, see the Instructions for Form 8582 to find
out if you must complete and attach Form 8582 to figure any
losses allowed.
Activities of real estate professionals. If you were a real es-
tate professional for 2023, any rental real estate activity in
which you materially participated is not a passive activity. You
were a real estate professional for the year only if you met both
of the following conditions.
More than half of the personal services you performed in
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trades or businesses during the year were performed in real
property trades or businesses in which you materially participa-
ted.
1. Rental real estate activities are your only passive activi-
ties.
2. You do not have any prior year unallowed losses from
any passive activities.
You performed more than 750 hours of services during
the year in real property trades or businesses in which you ma-
terially participated.
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3. All of the following apply if you have an overall net loss
from these activities.
If you are married filing jointly, either you or your spouse
must meet both of the above conditions without taking into ac-
count services performed by the other spouse.
rental real estate activities.
b. If married filing separately, you lived apart from your
spouse all year.
A real property trade or business is any real property devel-
opment, redevelopment, construction, reconstruction, acquisi-
tion, conversion, rental, operation, management, leasing, or
brokerage trade or business. Services you performed as an em-
ployee are not treated as performed in a real property trade or
business unless you owned more than 5% of the stock (or more
than 5% of the capital or profits interest) in the employer.
c. Your overall net loss from these activities is $25,000 or
less ($12,500 or less if married filing separately).
d. You have no current or prior year unallowed credits
from passive activities.
$100,000 or less ($50,000 or less if married filing separately).
If you qualify as a real estate professional, rental real estate
activities in which you materially participated are not passive
activities. For purposes of determining whether you materially
participated in your rental real estate activities, each interest in
rental real estate is a separate activity unless you elect to treat
all your interests in rental real estate as one activity. To make
this election, attach a statement to your original tax return that
declares you are a qualifying taxpayer for the year and you are
making the election under section 469(c)(7)(A). The election
applies for the year made and all later years in which you are a
real estate professional. You can revoke the election only if
your facts and circumstances materially change.
f. You do not hold any interest in a rental real estate activi-
ty as a limited partner or as a beneficiary of an estate or a trust.
Active participation. You can meet the active participation
requirement without regular, continuous, and substantial in-
volvement in real estate activities. But you must have participa-
ted in making management decisions or arranging for others to
provide services (such as repairs) in a significant and bona fide
sense. Such management decisions include:
Approving new tenants,
Deciding on rental terms,
Approving capital or repair expenditures, and
Other similar decisions.
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If you did not make this election on your timely filed
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return, you may be eligible to make a late election to
treat all your interest in rental real estate as one activ-
TIP
You are not considered to actively participate if, at any time
during the tax year, your interest (including your spouse's inter-
est) in the activity was less than 10% by value of all interests in
the activity. Except as provided in regulations, limited partners
aren't treated as actively participating in a partnership's rental
real estate activities.
ity. See Rev. Proc. 2011-34, 2011-24 I.R.B. 875, available at
If you were a real estate professional for 2023, complete
Schedule E, line 43.
Other activities. The rental of a dwelling unit that you used as
a home is not subject to the passive loss limitation rules. See
Line 2, later, to see if you used the dwelling unit as a home.
Modified adjusted gross income. This is your adjusted gross
income from Form 1040, 1040-SR, or Form 1040-NR, line 11,
without taking into account:
Any allowable passive activity loss,
Rental real estate losses allowed for real estate professio-
A working interest in an oil or gas well you held directly or
through an entity that did not limit your liability is not a pas-
sive activity even if you did not materially participate.
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Taxable social security or tier 1 railroad retirement bene-
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Royalty income not derived in the ordinary course of a trade
or business reported on Schedule E in most cases is not consid-
ered income from a passive activity.
fits,
Deductible contributions to a traditional IRA or certain
other qualified retirement plans under section 219,
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For more details on passive activities, see the Instructions
for Form 8582 and Pub. 925.
The student loan interest deduction,
The deduction for one-half of self-employment tax,
The exclusion from income of interest from series EE and
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I U.S. savings bonds used to pay higher education expenses,
E-4
Any excluded amounts under an employer's adoption as-
sistance program, and
2023. Accordingly, all lines related to qualified sick and family
leave wages remain on the employment tax returns for 2023.
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The deduction allowed for foreign-derived intangible in-
come and global intangible low-taxed income.
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Line A
If you made any payments in 2023 that would require you to
file any Forms 1099, check the “Yes” box. Otherwise, check
the “No” box. In general, if you paid at least $600 for services
performed by someone who is not your employee (nonemploy-
ee compensation), you must file Form 1099-NEC; and, you
generally must file Form 1099-MISC if you paid at least $600
in rents, prizes, medical and health care payments, or other
miscellaneous amounts that would be income to the person re-
ceiving them. See the 2023 General Instructions for Certain In-
formation Returns if you are unsure whether you were required
to file any Forms 1099. Also, see the separate instructions for
each Form 1099.
Recordkeeping
You must keep records to support items reported on Schedule E
in case the IRS has questions about them. If the IRS examines
your tax return, you may be asked to explain the items repor-
ted. Good records will help you explain any item and arrive at
the correct tax with a minimum of effort. If you do not have re-
cords, you may have to spend time getting statements and re-
ceipts from various sources. If you cannot produce the correct
documents, you may have to pay additional tax and be subject
to penalties.
Income or Loss From Rental Real
Specific Instructions
Estate and Royalties
Filers of Form 1041. If you are a fiduciary filing Schedule E
with Form 1041, enter the estate's or trust's employer identifi-
cation number (EIN) in the space for “Your social security
number.”
Use Part I to report the following.
Income and expenses from rental real estate (including
personal property leased with real estate).
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Royalty income and expenses.
For an estate or trust only, farm rental income and expen-
ses based on crops or livestock produced by the tenant. Estates
and trusts do not use Form 4835 or Schedule F (Form 1040)
for this purpose.
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Part I
termine if you should report your rental real estate
and royalty income on Schedule C or Form 4835, in-
stead of Schedule E.
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If you own a part interest in a rental real estate property, re-
port only your part of the income and expenses on Schedule E.
CAUTION
Complete lines 1a, 1b, and 2 for each rental real estate prop-
erty. For royalty property, enter code “6” on line 1b and leave
lines 1a and 2 blank for that property.
Qualified paid sick leave and qualified paid family leave
payroll tax credit. Generally, the credit for qualified sick and
family leave wages, as enacted under the Families First Coro-
navirus Response Act (FFCRA) and amended and extended by
the COVID-related Tax Relief Act of 2020, for leave taken af-
ter March 31, 2020, and before April 1, 2021, and the credit for
qualified sick and family leave wages under sections 3131,
3132, and 3133 of the Internal Revenue Code, as enacted under
the American Rescue Plan Act of 2021 (the ARP) for leave
taken after March 31, 2021, and before October 1, 2021, have
expired. However, employers that pay qualified sick and family
leave wages in 2023 for leave taken after March 31, 2020, and
before October 1, 2021, are eligible to claim a credit for quali-
fied sick and family leave wages in the quarter of 2023 in
which the qualified wages were paid. For more information,
see Form 941, lines 11b, 11d, 13c, and 13e; and Form 944,
lines 8b, 8d, 10d, and 10f. You must include the full amount
(both the refundable and nonrefundable portions) of the credit
for qualified sick and family leave wages in gross income on
line 3 or 4, as applicable, for the tax year that includes the last
day of any calendar quarter with respect to which a credit is al-
lowed.
If you have more than three rental real estate or royalty
properties, complete and attach as many Schedules E as you
need to list them. But answer lines A and B and fill in lines 23a
through 26 on only one Schedule E. The figures on lines 23a
through 26 on that Schedule E should be the combined totals
for all properties reported on your Schedules E. If you are also
using page 2 of Schedule E, use the same Schedule E on which
you entered the combined totals for Part I.
Personal property. Do not use Schedule E to report income
and expenses from the rental of personal property, such as
equipment or vehicles. Instead, use Schedule C if you are in the
business of renting personal property. You are in the business
of renting personal property if the primary purpose for renting
the property is income or profit and you are involved in the
rental activity with continuity and regularity.
If your rental of personal property is not a business, see the
instructions for Schedule 1 (Form 1040), lines 8l and 24b, to
find out how to report the income and expenses.
Extraterritorial income exclusion. Except as otherwise pro-
vided in the Internal Revenue Code, gross income includes all
income from whatever source derived. Gross income, however,
does not include extraterritorial income that is qualifying for-
eign trade income under certain circumstances. Use Form 8873
to figure the extraterritorial income exclusion. Report it on
Schedule E as explained in the Instructions for Form 8873.
Note. A credit is available only if the leave was taken after
March 31, 2020, and before October 1, 2021, and only after the
qualified leave wages were paid, which might, under certain
circumstances, not occur until a quarter after September 30,
2021, including qualifying quarterly payments made during
E-5
Any days you used the unit as your main home before or
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Chapter 11 bankruptcy cases. If you were a debtor in a chap-
ter 11 bankruptcy case, see Chapter 11 Bankruptcy Cases under
Income in the Instructions for Form 1040.
after renting it or offering it for rent, if you rented or tried to
rent it for at least 12 consecutive months (or for a period of less
than 12 consecutive months at the end of which you sold or ex-
changed it).
Income you report on Schedule E may be qualified
business income and entitle you to a deduction on
Form 1040, 1040-SR, or 1040-NR. See the Instruc-
TIP
Whether or not you can deduct expenses for the unit de-
pends on whether or not you used the unit as a home in 2023.
You used the unit as a home if your personal use of the unit
was more than the greater of:
tions for Form 8995-A for more information about this deduc-
tion.
14 days, or
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Line 1a
10% of the total days it was rented to others at a fair rent-
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For rental real estate property only, show the street address,
city or town, state, and ZIP code. If the property is located in a
foreign country, enter the city, province or state, country, and
postal code.
al price.
If you did not use the unit as a home, you can deduct all
Line 1b
If you did use the unit as a home and rented the unit out for
fewer than 15 days in 2023, do not report the rental income and
do not deduct any rental expenses. If you itemize deductions on
Schedule A, you can deduct allowable interest, taxes, and casu-
alty losses.
Enter one of the codes listed under “Type of Property” in Part I
of the form.
Land rental. Enter code “5” for rental of land. For details
about the tax treatment of income from this type of rental prop-
erty, see Rental of Nondepreciable Property in Pub. 925.
If you did use the unit as a home and rented the unit out for
15 or more days in 2023, you may not be able to deduct all
your rental expenses. See Pub. 527 for more information.
Self-rental. Enter code “7” for self-rental if you rent property
to a trade or business in which you materially participated. See
Rental of Property to a Nonpassive Activity in Pub. 925 for de-
tails about the tax treatment of income from this type of rental
property.
Regardless of whether you used the unit as a home,
expenses related to days of personal use do not qualify
as rental expenses. You must allocate your expenses
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CAUTION
Other. Enter code “8” if the property is not one of the other
types listed on the form. Attach a statement to your return de-
scribing the property.
based on the number of days of personal use to total use of the
property. For example, you used your property for personal use
for 7 days and rented it for 63 days. In most cases, 10% (7 ÷
70) of your expenses are not rental expenses and cannot be de-
ducted on Schedule E.
Line 2
If you rented out a dwelling unit that you also used for personal
purposes during the year, you may not be able to deduct all the
expenses for the rental part. “Dwelling unit” (unit) means a
house, apartment, condominium, mobile home, boat, or similar
property.
QJV. Check the box for “QJV” if you owned the property as a
member of a QJV reporting income not subject to self-employ-
Line 3
For each property listed on line 1a, report the number of
days in the year each property was rented at fair rental value
and the number of days of personal use.
If you received rental income from real estate (including per-
sonal property leased with real estate), report the income on
line 3. Use a separate column (A, B, or C) for each rental prop-
erty. Include income received for renting a room or other space.
A day of personal use is any day, or part of a day, that the
unit was used by:
Any other income should be included and reported on line 3,
with a statement attached to your return.
You for personal purposes;
Any other person for personal purposes, if that person
owns part of the unit (unless rented to that person under a
“shared equity” financing agreement);
•
•
If you received services or property instead of money as
rent, report the fair market value of the services or property as
rental income on line 3.
Anyone in your family (or in the family of someone else
who owns part of the unit), unless the unit is rented at a fair
rental price to that person as his or her main home;
•
Generally, rental real estate activity is reported on Sched-
ule E even if it is also a trade or business activity; however, if
you provided significant services to the renter, such as maid
service, report the rental activity on Schedule C, not on Sched-
ule E. Significant services do not include the furnishing of heat
and light, cleaning of public areas, trash collection, or similar
services.
Anyone who pays less than a fair rental price for the unit;
•
or
Anyone under an agreement that lets you use some other
•
unit.
Do not count as personal use:
Any day you spent working substantially full time repair-
ing and maintaining the unit, even if family members used it
for recreational purposes on that day; or
•
If you were a real estate dealer, include only the rent re-
ceived from real estate (including personal property leased with
E-6
this real estate) you held for the primary purpose of renting to
produce income. Do not use Schedule E to report income and
expenses from rentals of real estate you held for sale to cus-
tomers in the ordinary course of your business as a real estate
dealer. Instead, use Schedule C for those rentals.
You cannot take both the credit and the deduction for the
same expenditures.
Line 6
You can deduct ordinary and necessary auto and travel expen-
ses related to your rental activities, including 50% of meal ex-
penses incurred while traveling away from home.
For more details on rental income, see Pub. 527.
Rental income from farm production or crop shares. Re-
port farm rental income and expenses on Form 4835 if:
In most cases, you can either deduct your actual expenses or
take the standard mileage rate. You must use actual expenses if
you used more than four vehicles simultaneously in your rental
activities (as in fleet operations). You cannot use actual expen-
ses for a leased vehicle if you previously used the standard
mileage rate for that vehicle.
You are an individual,
You received rental income based on crops or livestock
produced by the tenant, and
•
•
You did not materially participate in the management or
operation of the farm.
•
Line 4
You can use the standard mileage rate for 2023 only if you:
Owned the vehicle and used the standard mileage rate for
the first year you placed the vehicle in service; or
•
Report on line 4 royalties from oil, gas, or mineral properties
(not including operating interests); copyrights; and patents. Use
a separate column (A, B, or C) for each royalty property.
Leased the vehicle and are using the standard mileage
rate for the entire lease period (except the period, if any, before
1998).
•
If you received $10 or more in royalties during 2023, the
payer should send you a Form 1099-MISC or similar statement
by February 15, 2024, showing the amount you received. Re-
port this amount on line 4.
If you take the standard mileage rate, multiply the number
of miles driven in connection with your rental activities by 65.5
cents a mile. Include this amount and your parking fees and
tolls on line 6.
If you are in business as a self-employed writer, inventor, ar-
tist, etc., report your royalty income and expenses on Sched-
ule C, not on Schedule E.
You cannot deduct rental or lease payments, deprecia-
tion, or your actual auto expenses if you use the
standard mileage rate.
!
CAUTION
You may be able to treat amounts received as “royalties” for
the transfer of a patent or amounts received on the disposal of
coal and iron ore as the sale of a capital asset. For details, see
Pub. 544.
If you deduct actual auto expenses:
Include on line 6 the rental activity portion of the cost of
gasoline, oil, repairs, insurance, tires, license plates, etc.; and
•
Enter on line 4 the gross amount of royalty income, even if
state or local taxes were withheld from oil or gas payments you
received. Include taxes withheld by the producer on line 16.
Show auto rental or lease payments on line 19 and depre-
ciation on line 18.
•
If you claim any auto expenses (actual or the standard mile-
age rate), you must complete Part V of Form 4562 and attach
Form 4562 to your tax return.
General Instructions for Lines 5 Through 21
Enter your rental and royalty expenses for each property in the
appropriate column. You can deduct all ordinary and necessary
expenses, such as taxes, interest, repairs, insurance, manage-
ment fees, agents' commissions, and depreciation.
See Pub. 527 and Pub. 463 for details.
Line 10
Do not deduct the value of your own labor or amounts paid
for capital investments or capital improvements.
Include on line 10 fees for tax advice and the preparation of tax
forms related to your rental real estate or royalty properties.
Enter your total expenses for mortgage interest (line 12), de-
preciation expenses and depletion (line 18), and total expenses
(line 20) on lines 23c through 23e, respectively, even if you
have only one property.
Do not deduct legal fees paid or incurred to defend or pro-
tect title to property, to recover property, or to develop or im-
prove property. Instead, you must capitalize these fees and add
them to the property's basis.
Renting out part of your home. If you rent out only part of
your home or other property, deduct the part of your expenses
that applies to the rented part.
Lines 12 and 13
In most cases, to determine the interest expense allocable to
your rental activities, you must have records to show how the
proceeds of each debt were used. Specific tracing rules apply
for allocating debt proceeds and repayment. In general, you al-
locate interest on a loan the same way you allocate the loan
proceeds. You allocate loan proceeds by tracing disbursements
to specific uses.
Credit or deduction for access expenditures. You may be
able to claim a tax credit for eligible expenditures paid or in-
curred in 2023 to provide access to your business for individu-
als with disabilities. See Form 8826 for details.
You can also elect to deduct up to $15,000 of qualified costs
paid or incurred in 2023 to remove architectural or transporta-
tion barriers to individuals with disabilities and the elderly.
E-7
The easiest way to trace disbursements to specific
uses is to keep the proceeds of a particular loan sepa-
rate from any other funds.
ples of improvements are adding substantial insulation or re-
placing an entire HVAC system. Amounts paid to improve your
property must generally be capitalized and depreciated (that is,
they cannot be deducted in full in the year they are paid or in-
TIP
Limitation on business interest. Interest you paid as part of
your rental real estate activity is not subject to the limitation on
business interest unless your rental real estate activity is a trade
or business. If your rental real estate activity is a trade or busi-
ness, you must file Form 8990 to deduct any interest expenses
of that rental real estate activity unless you meet one of the fil-
ing exceptions in the Instructions for Form 8990.
Line 16
Do not reduce your deduction for social security and
Medicare taxes by the nonrefundable and refundable
portions of the FFCRA and ARP credits for qualified
sick and family leave wages claimed on an employment tax re-
turn. Instead, report the credits as income on line 3 or 4, as ap-
plicable.
!
CAUTION
If the interest you paid in your rental real estate trade or
business is limited, figure the limit on your business interest
expenses on Form 8990 before completing lines 12 and 13.
the reduced interest on lines 12 and 13. The interest you can't
deduct this year will carry forward to next year on Form 8990.
Line 17
You can deduct the cost of ordinary and necessary telephone
calls related to your rental activities or royalty income (for ex-
ample, calls to the renter). However, the base rate (including
taxes and other charges) for local telephone service for the first
telephone line into your residence is a personal expense and is
not deductible.
If your real estate activity is not a trade or business or you
meet one of the filing exceptions for Form 8990, follow the in-
ductible interest on lines 12 and 13.
How to report. If you have a mortgage on your rental proper-
ty, enter on line 12 the amount of interest you paid for 2023 to
banks or other financial institutions.
Line 18
Do not deduct prepaid interest when you paid it. You can
deduct it only in the year to which it is properly allocable.
Points, including loan origination fees, charged only for the use
of money must be deducted over the life of the loan.
Depreciation is the annual deduction you must take to recover
the cost or other basis of business or investment property hav-
ing a useful life substantially beyond the tax year. Land is not
depreciable.
If you paid $600 or more in interest on a mortgage during
2023, the recipient should send you a Form 1098 or similar
statement by January 31, 2024, showing the total interest re-
ceived from you.
Depreciation starts when the property is available and ready
for use in your business or for the production of income. It
ends when you deduct all your depreciable cost or other basis
or no longer use the property in your business or for the pro-
duction of income.
If you paid more mortgage interest than is shown on your
Form 1098 or similar statement, see Pub. 334 regarding deduc-
tion limits to find out if you can deduct part or all of the addi-
tional interest. If you can, enter the entire deductible amount on
line 12. Attach a statement to your return explaining the differ-
ence. In the space to the left of line 12, enter “See attached.”
See the Instructions for Form 4562 to figure the amount of
depreciation to enter on line 18.
You must complete and attach Form 4562 only if you are
claiming:
Depreciation on property first placed in service during
2023;
Depreciation on listed property (defined in the Instruc-
tions for Form 4562), including a vehicle, regardless of the date
it was placed in service; or
•
Note. If the recipient was not a financial institution or you did
not receive a Form 1098 from the recipient, report your deduc-
tible mortgage interest on line 13.
•
If you and at least one other person (other than your spouse
if you file a joint return) were liable for and paid interest on the
mortgage, and the other person received Form 1098, report
your share of the deductible interest on line 13. Attach a state-
ment to your return showing the name and address of the per-
son who received Form 1098. On the dotted line next to
line 13, enter “See attached.”
A section 179 expense deduction or amortization of costs
that began in 2023.
•
See Pub. 527 for more information on depreciation of resi-
dential rental property. See Pub. 946 for a more comprehensive
guide to depreciation.
If you have an economic interest in mineral property, you
may be able to take a deduction for depletion. Mineral property
includes oil and gas wells, mines, and other natural deposits
(including geothermal deposits). See section 614 and the rela-
ted regulations for rules on how to treat separate mineral inter-
ests.
Line 14
You can deduct the amounts paid for repairs and maintenance.
However, you cannot deduct the cost of improvements. Repairs
and maintenance costs are those costs that keep the property in
an ordinarily efficient operating condition. Examples are fixing
a broken lock or painting a room.
Separating cost of land and buildings. If you buy buildings
and your cost includes the cost of the land on which they stand,
you must divide the cost between the land and the buildings to
In contrast, improvements are amounts paid to better or re-
store your property or adapt it to a new or different use. Exam-
E-8
figure the basis for depreciation of the buildings. The part of
the cost that you allocate to each asset is the ratio of the fair
market value of that asset to the fair market value of the whole
property at the time you buy it.
from these entities for the alternative minimum tax on Form
6251 or Schedule I (Form 1041).
If you are not certain of the fair market values of the land
and the buildings, you can divide the cost between them based
on their assessed values for real estate tax purposes.
Part II
Income or Loss From Partnerships and S
Corporations
Line 19
If you are a member of a partnership or joint venture or a
shareholder in an S corporation, use Part II to report your share
of the partnership or S corporation income (even if not re-
ceived) or loss.
Enter on line 19 any ordinary and necessary expenses not listed
on lines 5 through 18.
You may be able to deduct, on line 19, part or all of the cost
of energy efficient commercial building property and energy
efficient building retrofit property placed in service during the
tax year. For details, see section 179D, Form 7205 and its sepa-
rate instructions, and Rev. Proc. 2022-14, 2022-7 I.R.B. 580,
If you elected to be taxed as a QJV instead of a part-
!
CAUTION
You should receive a Schedule K-1 from the partnership or
S corporation. You should also receive a copy of the Partner's
or Shareholder's Instructions for Schedule K-1. Your copy of
Schedule K-1 and its instructions will tell you where on your
return to report your share of the items. If you did not receive
these instructions with your Schedule K-1, see your tax return
instructions for how to get tax forms, instructions, and publica-
tions. Do not attach Schedules K-1 to your return. Keep them
for your records.
Line 21
If you have amounts for which you are not at risk, use Form
6198 to determine the amount of your deductible loss. Enter
that amount in the appropriate column of Schedule E, line 21.
In the space to the left of line 21, enter “Form 6198.” Attach
Form 6198 to your return. For details on the at-risk rules, see
At-Risk Rules, earlier.
If you are treating items on your tax return differently from
the way the partnership or S corporation reported them on its
return, you may have to file Form 8082.
Line 22
Do not complete line 22 if the amount on line 21 is from royal-
ty properties.
Special Rules That Limit Losses
If you have a rental real estate loss from a passive activity
(defined earlier), the amount of loss you can deduct may be
limited by the passive activity loss rules. You may need to
complete Form 8582 to figure the amount of loss, if any, to en-
ter on line 22. See the Instructions for Form 8582 to determine
if your loss is limited.
If you report a loss from a partnership or S corporation, your
loss may be reduced or not allowed this year. Apply the basis
rules, at-risk rules, and passive activity loss rules to your loss
on Schedule E.
If your loss is also subject to the excess business loss rules,
you figure that limitation separately on Form 461. Any reduc-
tion to your loss due to the excess business loss rules will not
be reflected on your Schedule E. See the Instructions for Form
461 for more information.
If your rental real estate loss is not from a passive activity or
you meet the exception for certain rental real estate activities
(explained earlier), you do not have to complete Form 8582.
Enter the (loss) from line 21 on line 22.
Basis rules for partnerships. Generally, you may not claim
your share of a partnership loss (including a capital loss) to the
extent that it is greater than the adjusted basis of your partner-
ship interest at the end of the partnership's tax year. Any losses
and deductions not allowed this year because of the basis limit
can be carried forward indefinitely and deducted in a later year
subject to the basis limit for that year. To figure the basis of
your interest in a partnership, you can use the Worksheet for
Adjusting the Basis of a Partner's Interest in the Partnership in
the Partner's Instructions for Schedule K-1 (Form 1065). For
more details on the basis rules for partnerships, see Pub. 541.
If you have an unallowed rental real estate loss from a prior
year that after completing Form 8582 you can include this year,
include that loss on line 22.
Parts II and III
If you need more space in Part II or III to list your income or
losses, attach a continuation sheet using the same format as
shown in Part II or III. However, be sure to complete the “To-
tals” columns for lines 29a and 29b, or lines 34a and 34b, as
appropriate. If you also completed Part I on more than one
Schedule E, use the same Schedule E on which you entered the
combined totals in Part I.
If you had a loss from a partnership that was not allowed
last year because of the basis rules, but all or part is allowed
After applying the basis rules, the loss you report on Sched-
ule E may be further reduced by the at-risk rules and passive
activity loss rules.
Tax preference items. If you are a partner, a shareholder in an
S corporation, or a beneficiary of an estate or trust, you must
take into account your share of preferences and adjustments
E-9
If you had a loss from the partnership or S corporation that
was not allowed last year because of the passive activity loss
how to report it.
Basis rules for S corporations. Generally, the deduction for
your share of aggregate losses and deductions reported on
Schedule K-1 (Form 1120-S) is limited to the basis of your
stock (determined with regard to distributions received during
the tax year) and loans from you to the corporation. The basis
of your stock is generally figured at the end of the corporation's
tax year. Any losses and deductions not allowed this year be-
cause of the basis limit can be carried forward indefinitely and
deducted in a later year subject to the basis limit for that year.
To figure your aggregated stock basis, you can generally use
Form 7203. For more details on the basis rules for S corpora-
tions, see the Instructions for Form 7203.
Excess business loss rules. If you report a loss on Schedule E
from a partnership or S corporation engaged in a trade or busi-
ness, use Form 461 to figure your excess business loss. Your
excess business loss will not be reflected on your Schedule E;
instead, it will be added to your income on Form 1040 and car-
ried forward to a subsequent year as a net operating loss. For
more information, see the Instructions for Form 461.
Domestic Partnerships
See the Schedule K-1 instructions before entering on your re-
turn other partnership items from a passive activity or income
or loss from any publicly traded partnership.
If you are claiming a deduction for your share of an aggre-
gate loss (or you receive a distribution, dispose of stock, or re-
ceive a loan repayment from an S corporation), check the box
on the appropriate line in Part III, column (e), and attach Form
7203 to your return.
You can deduct unreimbursed ordinary and necessary ex-
penses you paid on behalf of the partnership if you were re-
quired to pay these expenses under the partnership agreement.
If you had a loss from an S corporation that was not allowed
last year because of the basis rules, but all or part is allowed
After applying the basis rules, the loss you report on Sched-
ule E may be further reduced by the at-risk rules and passive
activity loss rules.
If you used loan proceeds to buy an interest in, or make a
contribution to the capital of, a partnership (debt-financed ac-
quisition), report your share of deductible partnership interest
expense on either Schedule A or Schedule E, depending on the
type of asset (or expenditure if the allocation is based on the
tracing of loan proceeds) to which the interest expense is allo-
these interest expenses.
At-risk rules. If you have (a) a loss or other deduction from
any activity carried on as a trade or business or for the produc-
tion of income by the partnership or S corporation, and (b)
amounts in the activity for which you are not at risk, your loss
er.
If you claimed a credit for federal tax on gasoline or other
fuels on your 2022 Form 1040, 1040-SR, or 1040-NR based on
information received from the partnership, enter as income in
column (h) or column (k), whichever applies, the amount of the
credit claimed for 2022.
If you are subject to the at-risk rules for any activity, check
the box on the appropriate line in Part II, column (f), of Sched-
ule E, and use Form 6198 to figure the amount of any deducti-
ble loss. If the activity is nonpassive, enter any deductible loss
from Form 6198 on the appropriate line in Part II, column (i),
of Schedule E.
Part or all of your share of partnership income or loss from
the operation of the business may be considered net earnings
from self-employment that must be reported on Schedule SE.
Enter the amount from Schedule K-1 (Form 1065), box 14,
code A, on Schedule SE after you reduce this amount by any
allowable expenses attributable to that income.
If you had a loss from the partnership or S corporation that
was not allowed last year because of the at-risk rules, but all or
After applying the at-risk rules, the loss you report on
Schedule E may be further reduced by the passive activity loss
rules.
Foreign Partnerships
Follow the instructions below in addition to the instructions
Passive activity loss rules. For more information about pas-
If you are a U.S. person, you may have received Forms
1099-B, 1099-DIV, and 1099-INT reporting your share of cer-
tain partnership income, because payors of income to the for-
eign partnership in most cases are required to allocate and re-
port payments of that income directly to each of the partners of
the foreign partnership. If you received both Schedule K-1 and
Form 1099 for the same type and source of partnership income,
report only the income shown on Schedule K-1 in accordance
with its instructions.
If you have a passive activity loss, in most cases you need to
complete Form 8582 to figure the amount of the loss to enter in
Part II, column (g), for that activity. But if you are a general
partner or an S corporation shareholder reporting your share of
a partnership or an S corporation loss from a rental real estate
activity and you meet all of the conditions listed earlier under
have to complete Form 8582. Instead, enter your (loss) in Part
II, column (g).
If you are not a U.S. person, you may have received Forms
1042-S reporting your share of certain partnership income, be-
cause payors of income to the foreign partnership in most cases
are required to allocate and report payments of that income di-
rectly to each of the partners of the foreign partnership. If you
If you have passive activity income, complete Part II, col-
umn (h), for that activity. If you have nonpassive income or
losses, complete Part II, columns (i) through (k), as appropri-
ate.
E-10
received both Schedule K-1 and Form 1042-S for the same
type and source of partnership income, report the income on
your return as follows.
Line 27
If you answered “Yes” on line 27, follow the instructions be-
low. If you do not follow these instructions, the IRS may send
you a notice of additional tax due because the amounts reported
by the partnership or S corporation on Schedule K-1 do not
match the amounts you reported on your tax return.
For all income effectively connected with the conduct of
a trade or business in the United States, report only the income
shown on Schedule K-1 in accordance with its instructions.
•
For all income not effectively connected with the conduct
•
of a trade or business in the United States, report on Sched-
ule NEC (Form 1040-NR) only the income shown on Form
1042-S (if you are required to file Form 1040-NR).
Losses Not Allowed in Prior Years Due to the Basis
or At-Risk Rules
Requirement to file Form 8865. If you are a U.S. person, you
may have to file Form 8865 if any of the following applies.
Enter your total prior year unallowed losses that are now
•
deductible on a separate line in column (i) of line 28 . Do not
combine these losses with, or net them against, any current
year amounts from the partnership or S corporation.
1. You controlled a foreign partnership (that is, you owned
more than a 50% direct or indirect interest in the partnership).
Enter “PYA” in column (a) of the same line.
•
2. You owned at least a 10% direct or indirect interest in a
foreign partnership while U.S. persons controlled that partner-
ship.
Prior Year Unallowed Losses From a Passive Activity
Not Reported on Form 8582
3. You had an acquisition, disposition, or change in propor-
tional interest of a foreign partnership that:
Enter on a separate line in column (g) of line 28 your to-
•
tal prior year unallowed losses not reported on Form 8582.
Such losses include prior year unallowed losses now deductible
because you did not have an overall loss from all passive activ-
ities or you disposed of your entire interest in a passive activity
in a fully taxable transaction. Do not combine these losses
with, or net them against, any current year amounts from the
partnership or S corporation.
a. Increased your direct interest to at least 10% or reduced
your direct interest of at least 10% to less than 10%, or
b. Changed your direct interest by at least a 10% interest.
4. You contributed property to a foreign partnership in ex-
change for a partnership interest if:
a. Immediately after the contribution, you owned, directly
or indirectly, at least a 10% interest in the partnership; or
Enter “PYA” in column (a) of the same line.
•
b. The value of the property you contributed, when added
to the value of any other property you or any related person
contributed to the partnership during the 12-month period end-
ing on the date of transfer, exceeds $100,000.
Unreimbursed Partnership Expenses
You can deduct unreimbursed ordinary and necessary partner-
ship expenses you paid on behalf of the partnership on Sched-
ule E if you were required to pay these expenses under the part-
nership agreement. You can only deduct unreimbursed expen-
ses on Schedule E that are trade or business expenses under
section 162. Don't report unreimbursed partnership expenses
separately if the expenses are from a passive activity and you
are required to file Form 8582; otherwise, do the following.
Also, you may have to file Form 8865 if you contributed
property with built-in gain to a foreign partnership (or certain
domestic partnerships) or to report certain dispositions by a
foreign partnership of property you previously contributed to
that partnership if you were a partner at the time of the disposi-
tion.
Enter unreimbursed partnership expenses from nonpas-
•
For more details, including penalties for failing to file Form
8865, see Form 8865 and its separate instructions.
sive activities on a separate line in column (i) of line 28. Do not
combine these expenses with, or net them against, any other
amounts from the partnership.
S Corporations
Distributions of prior year accumulated earnings and profits of
S corporations are dividends and are reported on Form 1040 or
1040-SR, line 3b.
If the expenses are from a passive activity and you are not
•
required to file Form 8582, enter the expenses related to a pas-
sive activity on a separate line in column (g) of line 28. Do not
combine these expenses with, or net them against, any other
amounts from the partnership.
If you used loan proceeds to buy an interest in, or make a
contribution to the capital of, an S corporation (debt-financed
acquisition), report your share of deductible S corporation in-
terest expense on either Schedule A or Schedule E, depending
on the type of asset (or expenditure if the allocation is based on
the tracing of loan proceeds) to which the interest expense is
ing these interest expenses.
Enter “UPE” in column (a) of the same line.
•
Line 28
For nonpassive income or loss and passive income or losses for
which you are not filing Form 8582, enter in the applicable col-
umn of line 28 your current year ordinary income or loss (after
applying any special rules that limit losses) from the partner-
ship or S corporation. Report each related item required to be
reported on Schedule E (including items of income or loss sta-
ted separately on Schedule K-1) in the applicable column of a
separate line following the line on which you reported the cur-
rent year ordinary income or loss. Also, enter a description of
Your share of the net income of an S corporation is not sub-
ject to self-employment tax.
E-11
the related item (for example, depletion) in column (a) of the
same line.
line 37. Do not include this amount in the total on line 37. In-
stead, enter the amount on Form 1040, 1040-SR, or 1040-NR,
line 26.
If you are required to file Form 8582, see the Instructions
for Form 8582 before completing Schedule E.
A U.S. person who transferred property to a foreign trust
may have to report the income received by the trust as a result
of the transferred property if, during 2023, the trust had a U.S.
beneficiary. See section 679. An individual who received a dis-
tribution from, or who was the grantor of, or transferor to, a
foreign trust must also complete Part III of Schedule B (Form
1040) and may have to file Form 3520. In addition, the owner
of a foreign trust must ensure that the trust files an annual in-
formation return on Form 3520-A.
Debt-financed acquisition. A debt-financed acquisition is the
use of loan proceeds to buy an interest in, or to make a contri-
bution to the capital of, a partnership or S corporation. You
must allocate the loan proceeds and the related interest expense
among all the assets of the entity. You can use any reasonable
method.
For interest allocated to trade or business assets (or expendi-
tures), report the interest on a separate line of your Schedule E,
Part II. Enter "business interest" and the name of the partner-
ship or S corporation in column (a) and the amount in column
(i).
Part IV
For interest allocated to passive activity use, enter the inter-
est on Form 8582 as a deduction from the passive activity of
the partnership or S corporation. Show any deductible amount
on a separate line on your Schedule E, Part II. Enter "passive
interest" and the name of the entity in column (a) and the
amount in column (g).
Income or Loss From Real Estate Mortgage
Investment Conduits (REMICs)
If you are the holder of a residual interest in a REMIC, use Part
IV to report your total share of the REMIC's taxable income or
loss for each quarter included in your tax year. You should re-
ceive Schedule Q (Form 1066) and instructions from the RE-
MIC for each quarter. Do not attach Schedule(s) Q to your re-
turn. Keep it for your records.
For interest allocated to investment use, enter the interest on
Form 4952. Carry any deductible amount allocated to royalties
to a separate line of your Schedule E, Part II. Enter "investment
interest" and the name of the entity in column (a) and the
amount in column (i). Carry the balance of the deductible
amount to Schedule A, line 9.
If you are treating REMIC items on your tax return differ-
ently from the way the REMIC reported them on its return, you
may have to file Form 8082.
Any interest allocated to proceeds used for personal purpo-
ses is generally not deductible.
If you are the holder of a residual interest in more than one
REMIC, attach a continuation sheet using the same format as
in Part IV. Enter the combined totals of columns (d) and (e) on
Schedule E, line 39. If you also completed Part I on more than
one Schedule E, use the same Schedule E on which you entered
the combined totals in Part I.
For more information on allocating and reporting these in-
terest expenses, see Notice 88-37 in Cumulative Bulletin
1988-1. Also, see Notice 89-35 in Cumulative Bulletin 1989-1.
Owners of S corporation stock and debt. If you report a
loss, receive a distribution, dispose of stock, or receive a loan
repayment from an S corporation, you must check the box in
column (e) on line 28 and attach the required basis computa-
earlier.
REMIC income or loss is not income or loss from a passive
activity.
Note. If you are the holder of a regular interest in a REMIC,
do not use Schedule E to report the income you received. In-
stead, report it on Form 1040 or 1040-SR, line 2b.
Column (c). Report the total of the amounts shown on Sched-
ule(s) Q, line 2c. This is the smallest amount you are allowed
to report as your taxable income (Form 1040, 1040-SR, or
1040-NR, line 15). It is also the smallest amount you are al-
lowed to report as your alternative minimum taxable income
(AMTI) on Form 6251, line 4.
Part III
Income or Loss From Estates and Trusts
If you are a beneficiary of an estate or trust, use Part III to re-
port your part of the income (even if not received) or loss. You
should receive a Schedule K-1 (Form 1041) from the fiduciary.
Your copy of Schedule K-1 and its instructions will tell you
where on your return to report the items from Schedule K-1.
Do not attach Schedule K-1 to your return. Keep it for your re-
cords.
If the amount in column (c) is larger than your taxable in-
come would otherwise be, enter the amount from column (c)
on Form 1040, 1040-SR, or 1040-NR, line 15. Similarly, if the
amount in column (c) is larger than your AMTI would other-
wise be, enter the amount from column (c) on Form 6251,
line 4. Enter “Sch Q” on the dotted line to the left of this
amount on Form 1040, 1040-SR, or 1040-NR, line 15; and
Form 6251, line 4, if applicable.
If you are treating items on your tax return differently from
the way the estate or trust reported them on its return, you may
have to file Form 8082.
Note. These rules also apply to estates and trusts that hold a
residual interest in a REMIC. Be sure to make the appropriate
entries on the comparable lines on Form 1041.
If you have estimated taxes credited to you from a trust
(Schedule K-1 (Form 1041), box 13, code A), enter “ES pay-
ment claimed” and the amount on the dotted line next to
E-12
Do not include the amount shown in column (c) in the
total on Schedule E, line 39.
less the form displays a valid OMB control number. Books or
records relating to a form or its instructions must be retained as
long as their contents may become material in the administra-
tion of any Internal Revenue law. Generally, tax returns and re-
turn information are confidential, as required by section 6103.
!
CAUTION
Column (e). Report the amount(s) shown on Schedule(s) Q,
line 3b.
The time needed to complete and file this form will vary de-
pending on individual circumstances. The estimated burden for
individual taxpayers filing this form is included in the esti-
mates shown in the instructions for their individual income tax
return. The estimated burden for all other taxpayers who file
this form is approved under OMB control number 1545-1972
and is shown next.
Part V Summary
Line 42
Special estimated tax rules may apply if you have gross farm-
ing or fishing income. You will not be charged a penalty for
underpayment of estimated tax if:
Recordkeeping .
Learning about the law or the form.
Preparing the form
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. 3 hr., 39 min.
. 2 hr., 16 min.
. 3 hr., 25 min.
1. Your gross farming or fishing income for 2022 or 2023
is at least two-thirds of your gross income; and
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Copying, assembling, and sending the form to
the IRS .
2. You file your 2023 tax return and pay the tax due by
March 1, 2024.
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. 34 min.
For details, see chapter 15 of Pub. 225.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we
would be happy to hear from you. See the instructions for the
tax return with which this form is filed.
Paperwork Reduction Act Notice. We ask for the informa-
tion on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We
need it to ensure that you are complying with these laws and to
allow us to figure and collect the right amount of tax.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act un-
E-13