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Enter two family rental on Sch E seperatly

Level 4

Hi,

A client keep track and report incoem & expenses for each unit  (of two family) seperately on Sch E for 2018 & 2019.

Rents, renovation and most expense  - based on each units

Depreciation, land cost, insurance and mortgage spility 50% and 50%

Should I combine the two units into one property on Sch E of  2020 return?

If yes, do we need to amend 2018 & 2019 returns?

Anyone has any experiences?

 

 

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5 Replies 5
Level 15

If it's a duplex, I'd keep reporting those as separate units.  It also helps if your client ever sells one unit and keeps the other, or retires one to move in as his/her residence, etc.

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Still an AllStar
Level 4

Hi itonewbie,

thanks, it is duplex.

I agree it is better to separately report on Sch E in case they do condo conversion or move into one unit.

But mortgage loan person question why report separate

 

Level 15

That can be easily explained.  Everything is above board and consistent with tax law.  Perhaps the question to that person is why this should be a concern.

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Still an AllStar
Level 15

Didn't Art Linkletter used to have a television show called "Mortgage Loan People Say the Darndest Things"?

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Level 15

Your response reminds me of those old late night infomercials from a bygone era that ask people to buy programs that teach them how to get rich quick by buying foreclosed properties.

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Still an AllStar