Carl
Level 15

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I currently put all my properties and expenses and depreciation and rental income into schedule E

You must continue doing so, including any vehicle expenses related to the management/maintenance of those rental properties. That's why there's a section for vehicle expenses on the SCH E. You can't split the activities of a business between SCH C and SCH E.

Typically, long term rental real estate is reported on SCH E, not SCH C. For rental property to be a SCH C business, you have to meet stringent guidelines outlined by the IRS. Can't recall the exact publication at the moment, but IRS Publication 527 at https://www.irs.gov/pub/irs-pdf/p527.pdf touches on some of the requirements on page 12.

 

If you qualify to switch from SCH E to SCH C with your rental property, then you will need to seek professional help, as it's not a simple process by any stretch, and the TTX program can't handle it. Doing this kind of switch is not common, and has a high potential of triggering an audit. That's one (of many) reasons to seek professional help. Especially if your state taxes personal income.

For starters, SCH E residential assets are depreciated over 27.5 years, while SCH E business assets are depreciated over 39 years. To change from one schedule to the other requires a fair amount of paperwork on forms not included in the TTX program, and you have to justify the change to the IRS. This is just the tip of that iceberg too.