Schedule E Explained for Landlords With a Few Homes

If you rent out a house, a condo or rooms in a home, the income and expenses usually end up on Schedule E, the IRS form for supplemental income and loss. Part I is the part landlords care about. It looks dense, but it follows a simple pattern: one column per property, a few questions about how the property was used, the rent you received, and a list of expense lines that mirror the costs of owning a rental.

This guide walks through Part I line by line, using the 2025 form (see Schedule E), and explains the questions that most often trip up landlords with a few homes.

One column per property

Part I has three columns, A, B and C, so each page holds up to three properties. Each property gets its own column all the way down the form: its own rent, its own expenses and its own result. If you own more than three, you use additional pages.

This is why tracking each home separately all year matters. If your records lump homes together, you’ll have to divide every expense by hand before you can fill in the form.

At the top of each column you identify the property: its address and the type of property, such as a single-family residence or a multi-family building.

Line 2: fair rental days and personal use days

Line 2 asks two questions for each property:

Fair rental days: how many days in the year the property was rented at a fair rental price.
Personal use days: how many days you, your family, or anyone paying less than a fair rent used it.

These numbers matter because they decide whether the property is treated as a rental, a home, or something in between. The IRS rules for vacation homes and other dwellings used partly for personal purposes are in Topic 415. Two thresholds stand out:

If you use a dwelling as a residence and rent it out for fewer than 15 days in the year, you don’t report the rent and don’t deduct rental expenses.
You are treated as using a unit as a home if your personal use is more than the greater of 14 days or 10% of the days it was rented at fair rent.

Worked example: you rent a lake cabin for 120 days at a fair price and use it yourself for 20 days. Ten percent of 120 is 12, so the threshold is 14 days. Twenty personal days is more than 14, so the cabin counts as used as a home, and expenses must be divided between rental and personal use. A cabin you used for 10 days instead would fall under the threshold. If you have any personal use at all, it’s worth having a tax preparer look at the allocation.

For a home rented all year to long-term tenants, line 2 is straightforward: 365 fair rental days and zero personal use days.

Line 3: rents received

Line 3 is the rent you received for the property during the year. A few points:

Advance rent counts in the year you receive it, whatever period it covers.
A security deposit you plan to return isn’t rent and doesn’t go here. If you keep part of it at the end of a tenancy, that part becomes income when you keep it.
A deposit to be applied to the last month’s rent is advance rent, so it is income when received.

These rules come from Publication 527 (2025 edition).

Lines 5 to 19: expenses

Each expense goes on its own line, per property:

5 Advertising: listing fees, signs, online ads for a vacancy.
6 Auto and travel: trips to the property for rental business.
7 Cleaning and maintenance: cleaning between tenants, lawn care, routine upkeep.
8 Commissions: commissions paid to agents to find tenants.
9 Insurance: landlord, fire and liability policies.
10 Legal and other professional fees: attorney fees, tax preparation for the rental.
11 Management fees: a property manager’s fees.
12 Mortgage interest paid to banks: the interest part of your mortgage payments, not the principal.
13 Other interest: interest on other loans used for the rental.
14 Repairs: fixing what’s broken, such as a leaking pipe or a cracked window.
15 Supplies: small items used in the rental.
16 Taxes: property taxes on the rental.
17 Utilities: utilities you pay, rather than the tenant.
18 Depreciation expense or depletion.
19 Other: anything that doesn’t fit above, described.

Line 20 adds them up.

Repairs or improvements?

This is the line landlords argue about most. A repair keeps the property in working order and is deducted on line 14. An improvement adds value, extends the property’s life or adapts it to a new use, such as a new roof or a remodeled kitchen, and is generally depreciated over time instead. The difference can be large, so for any big job, ask your preparer before you file.

Mortgage payments

A monthly mortgage payment often has three parts: principal, interest and escrow. Only the interest goes on line 12. The principal repays the loan and isn’t deductible. The escrow part is money the lender holds to pay property taxes and insurance, which you report on lines 16 and 9 when it is actually paid.

Line 18: depreciation

You can’t deduct the cost of a rental home all at once. Instead, residential rental property is depreciated straight line over 27.5 years under the general system, and land isn’t depreciable, so only the building’s share of your cost counts (Publication 946, 2025 edition).

Worked example: you buy a rental for $300,000, and $60,000 of that is the value of the land. The depreciable basis is $240,000. Divided over 27.5 years, that’s about $8,727 a year for a full year in service (the first and last years are prorated). The calculated amount goes on line 18. Many landlords leave this to their preparer, but it helps to know the number exists and is often the largest expense on the form.

After line 20

The form subtracts expenses from rents to get each property’s income or loss, then totals the properties. A rental loss isn’t always deductible in full against other income; rules on passive activities can limit it. That’s a good question for a tax professional, especially if your homes show a loss.

Getting ready for the form

The easiest Schedule E is one where you never have to sort anything at tax time:

Track income and expenses per property all year.
Use the line numbers above as your expense categories.
Record days rented and days of personal use as they happen.
Split each mortgage payment into principal, interest and escrow.
Keep purchase records and improvement receipts for depreciation.

How Kemback fits

Rental Houses, part of Kemback Business, puts each expense on its Schedule E line, splits each mortgage payment into principal, interest and escrow, and produces Schedule E lines per home for a tax year as CSV and a printable page for you or your preparer. Kemback doesn’t prepare or file your return, and depreciation is entered by hand. See rental property tracking, pricing or create an account.

This post is general information, not tax advice. Tax rules change over time; check with a qualified tax professional for your situation.

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This article is general information, not financial, tax or legal advice. For decisions about your situation, talk to a qualified professional.