What is Schedule E?
Definition Schedule E reports supplemental income and loss, most commonly from rental real estate and royalties, as well as pass-through income received on a Schedule K-1 from partnerships, S corporations, estates, and trusts. It attaches to Form 1040 and separates these activities from wages and self-employment income. Passive activity and at-risk rules can limit how much loss is deductible in a given year.
It is where landlords and investors reconcile their rental and pass-through income, so tracking basis and passive-loss limits here is key to an accurate return.