When would a taxpayer be required to complete a Schedule E? What type of rental property income is shown on Schedule E? How does the computation of income from rental properties differ from income computation on Schedule C?
Schedule E, page 1 is used to report rental real estate and royalty income. You would use Schedule E if you wanted to deduct expenses against your rental income.
When would a taxpayer be required to complete a Schedule E?
I would say that use of Schedule E is not required for rental property, but if expenses are to be deducted, then it is the required place to report.
There are other types of activity that report on page 2 of Schedule E including the taxpayer's percentage interest in the net activities of partnerships, S corporations, estates, trusts and other investment vehicles.
What type of rental property income is shown on Schedule E?
The solution explains the differences between Schedule E and Schedule C reporting including the basis for those differences and the tax affects in using the two different schedules.