Question

Switching from Schedule C to Schedule E

Forum|Forum|4 years ago
March 25, 2022
1 reply
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I have been renting a house from my father that I turned into an rental property. I do not live there at all. I have been renting it out and have been filing that income on a schedule C for the past 4 years. It is possible to switch it over to a schedule E this year?

T

ThomasM125

A real estate rental activity would normally be reported on a schedule E, so yes, you can and should report it on schedule E going forward. You will need to set up the rental activity in the Rental Properties and Royalties (Sch E) section of TurboTax and report the schedule C business as being disposed of in TurboTax.

For the assets, you need to set them up in the rental section by entering the cost you had entered in the business portion of TurboTax and the date placed in service for the rental. TurboTax will calculate the prior depreciation and continue to depreciate them as was happening on the schedule C.

As a side note, assuming you are not a real estate professional, if you reported net income from the rental on schedule C, you would have paid in self-employment tax that is not applicable to a rental activity. So, you could go back three years and amend returns to recoup that by transferring the rental activity from schedule C to schedule E.

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