And what product are you using? By your username above it says "Free Edition", which cannot prepare Schedule E or C. Or are you using desktop software (CD/download) installed on your computer?

Carl11_2

Employee

Schedule E is used for reporting rental income from residential rental real estate, and royalty income. That's it.
SCH C is used for reporting active business income, and that's it. Rental income from residential rental real estate is not reported on SCH C. If rental real estate is the only business income you have, then you have no need to be filling out a SCH C at all.

jquiring

I am using TurboTax Deluxe 2017 and it is calculating my E rental income at that same rate as my C income. Is that right?

Carl11_2

Employee

Schedule E is used to report "passive" income. This income is either rental income you receive because you own rental property, or a royalty payment you receive. Passive income is not subject to the additional self-employment tax, and that's why it's reported on SCH E. Passive income is income that you receive, but don't actually work for and "earn".

SCH C is used to report self-employment business income. This is income that you go out and actually "do" something to earn it. This income is reported on SCH C and in addition to the regular income tax, is also subject to the additional self-employment tax, if that SCH C income is more than $399 for the tax year. The Self-Employment tax is basically the employer's side of your social security and Medicare. It gets credited to the Social Security account of the business owner listed on the SCH C, and nobody else.

mikewax

If i am a LLC, only owner and have a store selling used product, i use Schedule C, correct?

thanks

MDW

VolvoGirl

Employee

Yes if you are a Single Member LLC. But if your LLC is an S corp you need to file a separate 1120 S Business return.

pjackson8

I have a client that previous years had rental reported on schedule E and in 2022 set up a LLC specifically for the rentals for legal reasons, no change in service so I believe the properties should still be reported on the schedule E however the client is also a realtor that had 1099 NEC income and does a schedule C for this business, should the rentals be conjoined with the schedule C or keep on the schedule E?

JohnW152

Since these constitute separate for-profit activities -- basically, rentals vs. services -- the rentals should remain reported on Schedule E, his realtor 1099-NEC services to be reported on Schedule C.