PA-20S/PA-65 Schedule E: 2025 PA Schedule E - Rent and Royalty Income (Loss) (PA-20S/PA-65 E) (2025)
Pennsylvania · Pennsylvania DOR · Used for tax years 2025
PA-20S/PA-65 Schedule E reports rent and royalty income or loss for PA S corporations, partnerships, and LLCs filing as S corporations or partnerships for federal income tax purposes. It lists properties, income, and expenses and calculates net rent and royalty income or loss fro
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 its classification. Its treatment as a passive activity for federal tax purposes does not control the Pennsylvania classification.
What you'll need
Have these forms and details available:
- Federal Form 8825: Schedule E should reflect the 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: Each property's street address, city or town, state, property type, and any lot, apartment, or unit number.
- PA Schedule M, Part II: Complete this to reflect Pennsylvania adjustments.
- PA Schedules RK-1 and NRK-1, if applicable: These supply rent and royalty amounts used on Lines 22 and 23.
- Loan-use records, if claiming interest expenses: These must show how the proceeds of each loan were used.
- An itemized statement, if needed: Submit one for each property's other expenses if Line 16 does not provide enough space.
Common mistakes
- Claiming federal bonus depreciation: Pennsylvania personal income tax law does not allow it. Adjust depreciation on Schedule M, Part II.
- Using incomplete property addresses: Each property must have a specific address. For a multi-unit property, include the apartment or unit number for each unit.
- Putting totals on later pages: If you list more than four rental properties on multiple pages, all totals should appear on the first page.
- Apportioning rental income: The instructions say to allocate it based on expenses and income and use actual amounts in Section II.
- Reporting rental-property disposition gains or losses 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 Schedule E to list additional properties. Put all totals on the first page when the schedule has more than one page.
Should I combine rental income and royalties in one column?
No. Report rental income and royalty income separately, using different columns. Enter amounts in whole dollars under the corresponding property column.
What if a tenant pays rent with services or property?
Report the fair market value of those services or property as rental income.
How do I identify property outside Pennsylvania?
Fill in the outside-Pennsylvania oval in Section I. Report income or loss from property outside Pennsylvania on Line 21, and fill in the loss oval if applicable.
Does Pennsylvania follow federal at-risk and passive activity loss rules?
No. The instructions state that Pennsylvania does not follow those federal rules.