Thank you very much. This is very helpful.
I have W2. I heard that when you have both W2 and Schedule C, the risk of an audit being triggered is high and the audit is very time-consuming.
So, I prefer to use Schedule E if possible.
I paraphrase your reply and other linked articles to confirm my understanding:
- In Schedule E, the only mechanism to deduct a passive loss on active income is to declare REP (subject to passive loss limitations, wipe out if AGI > 150k).
- There is no mechanism for Schedule E to make use of Section 469 and deduct a passive loss from active income.
- If I want to apply Section 469 exception (short-term + material participation), the only way is to file Schedule C.
I'm still curious about Schedule E. Other than REP, are there any other ways to use Schedule E and don't generate 8582?
Thanks again for helping
