Question

Can I group 2 rental property income and expenses as one?

Have 2 vacation rental homes on my land. Can I group 2 rental property income and expenses as one? If so, how do I go about it?

Employee

While there is no rule against combining rental properties for Schedule E, you should enter each property separately for several reasons.

Rental activity may be different for each property. This includes number of days rented and income received.
Rental expenses may vary during the year, especially for repairs, maintenance, and supplies.
Depreciation may be different, depending on the cost of the rental property and/or the date it was placed in service.
Rental use may change for one property and not the other. Conversion to personal use, for example, or not renting one property for the entire year.
Also, if you sell one of the properties, you need to have separate records for the rental use.

For these reason, and others, we recommend that you set up a separate Rental Property for each unit to report on Schedule E.

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