@BrittanyS wrote:
You will report passive income and losses on the Schedule E. Per, the IRS, "Use Schedule E (Form 1040) to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs)".
Just because something is passive does NOT automatically put it on Schedule E. They have a lending business, not a rental property. If it is a business, this goes on Schedule C.
