Reporting Rental Income

Rental income from real estate is generally reported on Part I of Schedule E (Form 1040) [1]. Report income on line 3, using a separate column (A, B, or C) for each property. If you received services or property instead of cash, report the fair market value as rental income [2].

Two exceptions shift reporting to Schedule C: (1) you provide substantial services (e.g., maid service, meals, transportation) to renters, or (2) you are a real estate dealer renting property held for sale [3].

Rental activity is passive by statute, so passive loss rules apply. If the property is also used personally, you must track fair rental days vs. personal use days on Schedule E [1].

I can go deeper on passive loss limits, mixed-use/vacation home rules, or short-term rental treatment if useful.