Income or Loss From Rental Real Estate and Royalties

Rental real estate and royalty income are reported on Schedule E (Form 1040) for individual taxpayers. This form captures income and expenses related to rental properties, royalties, and other similar activities. It is essential to accurately report these amounts to ensure proper tax calculation.

What to Report on Schedule E

Rental Real Estate Income and Expenses: Includes income and expenses from rental properties, including personal property leased with real estate.
Royalty Income and Expenses: Covers income and related expenses from royalties.
Other Entities: Estates and trusts may report farm rental income and expenses based on crops or livestock produced by tenants, but they do not use Form 4835 or Schedule F (Form 1040) for this purpose.

Reporting Requirements

Individuals must report rental real estate, royalties, partnerships, S corporations, trusts, and other similar income on Schedule E. This information is then transferred to Form 1040, specifically to Schedule 1, Line 5, which captures supplemental income or loss from these sources.

Additional Considerations

Form 8865 (Partnership Return): If you are a partner in a partnership, you may receive a Schedule K-1 that includes rental real estate income or loss. This must be reported on Schedule E.
Form 461 (for Estates/Trusts): Estates and trusts report rental real estate, royalties, and other supplemental income on Form 461, Line 5.
Form 4797 or Form 8949: If you sell rental property, the gain or loss must be reported on either Form 4797 (Sales of Business Property) or Form 8949 (Sales and Other Dispositions of Capital Assets), depending on the purpose of the rental activity. The net gain or loss is then reported on Schedule D (Form 1040).

How to File Using OLT (Online Taxes) Software

To add Schedule E in OLT (Online Taxes) software:

Navigate to your tax return in the software.
Under the Federal section, go to the Income section.
Click on "Show more" near Rental, Royalty, Partnership, S Corp, Trust.
Select "Add or Edit" next to Rental Real Estate and Royalties Income/Loss - Schedule E.
Follow the on-screen instructions to complete the form.

Source:

Schedule E (Form 1040)

Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions.