1) if you are only filing a Sch E you are NOT in the business of renovating properties ... you are an investor who fixes up rentals to rent ... this is why I mentioned setting up a totally separate business where the rentals can pay the Sch C business for the work you do and where you can deduct the tools properly. Putting income on the Sch C you will be self employed and pay fed/state and SE taxes that way.
