While there is no rule against combining rental properties for Schedule E, you should enter each property separately for several reasons.
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Rental activity may be different for each property. This includes number of days rented and income received.
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Rental expenses may vary during the year, especially for repairs, maintenance, and supplies.
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Depreciation may be different, depending on the cost of the rental property and/or the date it was placed in service.
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Rental use may change for one property and not the other. Conversion to personal use, for example, or not renting one property for the entire year.
- Also, if you sell one of the properties, you need to have separate records for the rental use.
For these reason, and others, we recommend that you set up a separate Rental Property for each unit to report on Schedule E.
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