Schedule E: Supplemental Income and Loss (2025)

Who files this form

Use Schedule E to report income or loss from:

• Rental real estate and royalties.
• Partnerships and S corporations.
• Estates and trusts.
• Residual interests in real estate mortgage investment conduits (REMICs).

Partners and S corporation shareholders use Part II to report their share of income or loss, even if the income was not received.

Some activities belong elsewhere. Use Schedule C if you are in the business of renting personal property or provide significant services to real estate renters, such as maid service. Self-employed writers, inventors, and artists report business royalty income and expenses on Schedule C.

Individuals who receive farm rent based on crops or livestock produced by a tenant, without materially participating in the farm's management or operation, use Form 4835. The net amount from that form goes on Schedule E, line 40.

When it's due

The instructions print these statement dates for tax year 2025:

• January 31, 2026: If you received $10 or more in royalties during 2025, the payer should send you Form 1099-MISC or a similar statement by this date.
• January 31, 2026: If you paid $600 or more in mortgage interest during 2025, the recipient should send you Form 1098 or a similar statement by this date.

These are dates for receiving statements, not a Schedule E filing deadline.

What you'll need

Keep records supporting the income, expenses, and other items you report. Depending on your activities, gather:

• Rental property addresses, property types, and the number of fair rental and personal-use days.
• Records of rents, royalties, and expenses such as repairs, insurance, taxes, utilities, management fees, and interest.
• Forms 1099-MISC or similar royalty statements and Forms 1098 or similar mortgage interest statements, if received.
• Schedules K-1 and their instructions for partnership, S corporation, estate, or trust income and losses.
• Schedules Q for REMIC residual interests.
• Records showing how loan proceeds were used and information needed to figure depreciation.

Additional forms may be needed, including Form 4835 for qualifying farm rentals, Form 6198 for at-risk loss limits, Form 8582 for passive activity loss limits, and Form 7203 for S corporation stock and debt basis.

If you claim auto expenses, including the standard mileage rate, complete Part V of Form 4562 and attach Form 4562 to your return.

How to file

Attach Schedule E to Form 1040, 1040-SR, 1040-NR, or 1041.

You may attach your own schedules to report income or loss from these sources, but use the same format as Schedule E. Enter total income and total loss separately for each part, and put loss figures in parentheses.

If you file Schedule E with Form 1041 as a fiduciary, enter the estate's or trust's employer identification number in the space labeled “Your social security number.”

Instructions and the latest information are available at IRS.gov/ScheduleE.

Common mistakes

• Reporting amounts that do not match Schedule K-1 without following the instructions. The IRS compares your return with Schedules K-1. If you answer “Yes” on line 27, follow its special reporting instructions for prior-year losses and unreimbursed partnership expenses.
• Deducting personal-use expenses as rental expenses. Expenses for personal-use days do not qualify as rental expenses. Allocate expenses between rental and personal use.
• Combining the standard mileage rate with other vehicle deductions. If you use the standard mileage rate, you cannot also deduct vehicle rental or lease payments, depreciation, or actual auto expenses.
• Missing an S corporation basis computation. If you report a loss, receive a distribution, dispose of stock, or receive a loan repayment from an S corporation, check line 28, column (e), and attach the required basis computation.
• Ignoring the excess business loss limit. A loss on line 26, 32, 37, or 39 may be subject to this limit. Figure it on Form 461, not by reducing those Schedule E lines.

Questions people ask

What if I have more than three rental or royalty properties?

Complete and attach as many Schedules E as needed. Answer lines A and B and complete lines 23a through 26 on only one Schedule E, using combined totals for all properties. If you also use page 2, use the same Schedule E that contains those combined totals.

Do I attach my partnership or S corporation Schedule K-1?

No. Keep these Schedules K-1 for your records. Use each Schedule K-1 and its instructions to determine where to report your share of the items.

Can I deduct the full amount of a loss?

Not always. Basis, at-risk, passive activity, and excess business loss rules may reduce or disallow a loss. Which rules apply depends on the activity and your circumstances.

Can I deduct improvements the same way as repairs?

No. Repairs and maintenance, such as fixing a broken lock or painting a room, may be deducted. Improvements, such as replacing an entire HVAC system, generally must be capitalized and depreciated rather than deducted in full when paid or incurred.

What if a tenant pays me with services or property instead of money?

Report the fair market value of the services or property as rental income on line 3.

Official sources

• https://www.irs.gov/pub/irs-prior/f1040se--2025.pdf
• https://www.irs.gov/pub/irs-prior/i1040se--2025.pdf