PA-20S/PA-65 Schedule E: 2024 PA Schedule E - Rent and Royalty Income (Loss) (PA-20S/PA-65 E) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-20S/PA-65 Schedule E reports rent and royalty income, expenses, and net income or loss for PA S corporations and partnerships, including LLCs filing as S corporations or partnerships for federal income tax purposes. It separates income or loss from Pennsylvania sources from am
Who files this form
PA S corporations, partnerships, and LLCs filing as S corporations or partnerships for federal income tax purposes use this schedule to report rent and royalty income or loss.
Whether income belongs on Schedule E or Schedule M, Column (b), depends on how the income is classified. Its treatment as a passive activity for federal tax purposes does not control the Pennsylvania classification.
What you'll need
- Federal Form 8825: Schedule E should reflect the rental and royalty income and expenses reported on this form.
- PA-20S/PA-65 Information Return: Use the same business name and nine-digit federal employer identification number (FEIN).
- Property details: Have each property's street address, city or town, state, and property type. Include the lot, apartment, or unit number where applicable.
- PA-20S/PA-65 Schedule M, Part II: Complete this to show Pennsylvania adjustments.
- PA Schedules RK-1 and NRK-1, if applicable: These supply the rent and royalty amounts used on Lines 22 and 23.
- Loan-use records, if claiming interest expenses: You must have records showing how you used each loan's proceeds.
- An itemized statement, if needed: Submit a statement of other expenses for each property if Line 16 does not provide enough space.
Common mistakes
- Claiming federal bonus depreciation for Pennsylvania. Pennsylvania does not allow it. Adjust depreciation expense on Schedule M, Part II.
- Using incomplete property addresses. Each property must be clearly identified. For a multi-unit rental property, include the apartment or unit number for each unit.
- Putting totals on later pages. If more than four rental properties require additional pages, put all totals on the first page.
- Apportioning rental income. The instructions say rental income must be allocated based on income and expenses. Use actual amounts in Section II.
- Reporting a rental-property disposition on Schedule E. Net gain or loss from federal Form 4797 for the disposition of rental real estate property must be reported on PA-20S/PA-65 Schedule D.
Questions people ask
What if I have more than four properties?
Copy PA-20S/PA-65 Schedule E to list additional properties. Put all totals on the first page.
Should I combine rental and royalty income in one column?
No. Report rental income and royalty income separately, using different columns. Enter amounts in whole dollars.
What if I receive services or property instead of cash rent?
Report the fair market value of the services or property as rental income.
How do I identify property outside Pennsylvania?
Fill in the outside-Pennsylvania oval in Section I. Line 21 totals income or loss from property outside Pennsylvania, and Line 25 combines Lines 21 and 23.
Does Pennsylvania follow federal passive activity loss or at-risk rules?
No. The instructions state that Pennsylvania does not follow federal At-Risk Rules or Passive Activity Loss Rules.