What is a 1040 Schedule E

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  Real estate comes with a lot of technicalities, especially tax forms. In today’s article, we go into detail about the 1040 Schedule E and how Green Ocean Property Management can guide you through tax forms such as this.     Defining the 1040 Schedule E Form   Now, a 1040 Schedule E is a…

WHAT IS 1040 SCHEDULE E

 

Real estate comes with a lot of technicalities, especially tax forms. In today’s article, we go into detail about the 1040 Schedule E and how Green Ocean Property Management can guide you through tax forms such as this.

 

Tax Time - 1040 Schedule E

 

Defining the 1040 Schedule E Form

 

Now, a 1040 Schedule E is a form that you submit to the Internal Revenue Service that states the income or losses from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs). At the end of the day, the purpose is to know what type of income and losses you are going to get.

 

Typically, it’s going to be as a result of something called the K-1. A lot of corporations, businesses, and LLCs will issue a K-1 for those profits and losses. For example, for all the real estate partnerships I have, my Certified Public Accountant (CPA) will go through the records and determine how much income and expenses we have, what our net losses or income are, and issue out a K-1 based upon the percentage of ownership.

 

Let’s just say I own 50-50 with someone. They will get one for 50%, and I’m going to get one for the other 50%. I’m going to take all my K-1s based on my different corporations, businesses, and real estate holdings, add them all up, and put them on Schedule E. And this Schedule E can be really long and calculated to see how much income and expenses – losses or profits – that you have at the end of the year.

 

We guide you through this type of process because you have to make sure you are doing this right, especially if you have partners within a deal.

 

Filling Out Tax Forms - 1040 Schedule E

 

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So if you or anyone else you know is looking for a proactive property manager to help guide you through tax forms – not a CPA, but we can refer you to one – but at least guide you on the high level such as this, please think of Green Ocean Property Management: where you get more than a property manager, you get peace of mind.

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