PA-40 Schedule E: 2024 PA Schedule E - Rents and Royalty Income (Loss) (PA-40 E) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-40 Schedule E reports net income or loss from rents, royalties, patents, and copyrights for individuals, estates, and trusts. It lists income and expenses and is included with a Pennsylvania PA-40 or PA-41 tax return.
Who files this form
Complete 2024 PA-40 Schedule E if you, your spouse, or an estate or trust have net income or loss from:
- Rental property.
- Royalties, including oil and gas wells, book sales, or other sources.
- Patents or copyrights.
Include the schedule with your PA-40 or PA-41 return, even if you are only reporting a loss.
Use PA Schedule C instead if you are in the business of renting personal property, extracting minerals, or producing products from patents and copyrights. Real estate dealers must also use Schedule C for rentals of real estate held for sale to customers in the ordinary course of business.
What you'll need
Have the following information available:
- The taxpayer’s name and Social Security number, or the estate or trust’s name and FEIN. For a joint return, use the primary taxpayer’s name and SSN, even when reporting the spouse’s income.
- Each property’s type, description, complete address, ownership, and whether it is rented for profit.
- Rent and royalty amounts, plus expenses for each property. For interest allocated to rental activities, records must show how the borrowed money was used.
- Federal Forms 1099-MISC for oil and gas royalties. Report the gross royalty amount and identify each producer separately for each form received.
- PA Schedules RK-1 or NRK-1 for rent or royalty income from PA S corporations and partnerships. If those schedules are not provided, use federal Schedule K-1. Include a statement listing each entity’s name, FEIN, and income or loss.
- The applicable Pennsylvania sales tax license number for short-term rentals. If a third-party broker collects and remits hotel occupancy tax, provide the broker’s license number and mark “Yes” for the broker question.
How to file
Include the completed Schedule E with your original PA-40 Personal Income Tax Return or PA-41 Fiduciary Income Tax Return. Submit additional schedules if you have more than three properties.
If you later discover changes to income or expenses, include an amended Schedule E with Schedule PA-40 X or PA-41 X. Explain the changes in Section III on page 2 of that amendment schedule.
The supplied text does not give a mailing address or e-filing directions for Schedule E.
Common mistakes
- Using federal Schedule E instead. The instructions warn that Pennsylvania generally does not follow federal rules for calculating this income or loss.
- Deducting expenses for the entire home when only part is rented. Deduct only expenses, or percentages of expenses, that apply to the rented part.
- Claiming a loss on property not rented for profit. Pennsylvania does not permit losses from property rented without an intent to make a profit.
- Combining different rental-period lengths. If the same property has rentals of less than 30 days and rentals of 30 days or more, enter it as two separate properties and divide the income and expenses accordingly.
- Using one spouse’s loss to reduce the other spouse’s income. Calculate each spouse’s net income or loss separately and split joint income and losses equally.
- Leaving out an out-of-state or foreign property’s address. The complete address is required.
Questions people ask
Do I need Schedule E if I only have a loss?
Yes. The schedule must be completed even if the only transaction is reporting a loss.
How should I round amounts?
Use whole dollars. Drop amounts below $0.50 and round amounts of $0.50 or more up to the next dollar.
Where do short-term rental amounts go on my return?
For properties marked “Yes” on Section II, line c, total the income and losses on line 22. Include that amount on PA-40 line 4 or PA-41 line 3, along with the other income or loss amounts specified in the instructions.
Where does Schedule E line 25 go?
Add lines 23 and 24 and report the total on PA-40 line 6 or PA-41 line 5. If you submit multiple schedules, total all line 23 and line 24 amounts.
Should oil and gas royalties be combined with rent from the same property?
No. Report oil and gas royalty income separately from rental income for the same property. Use the gross royalty amount reported on federal Form 1099-MISC.