Any and all expenses related to long term residential rental property are report on SCH E. While it may be possible, I don't know how to clarify that any better. Maybe the below will help?
SCH C income - A business reporting income/expences on SCH C is a business owned by own owner. It can be a sole proprietorship or a single member LLC that has not filed IRS form 2553 with the IRS to be treated "like an S-Corp" for tax purposes, or IRS Form 8832 to be treated "like a C-Corp" for tax purposes.
Income reported on SCH C is non-passive income, sometimes referred to as earned income. This type of income is paid to you when you go out and actually "do something" to earn it, or sell a physical product, or perform a service. That "something" may or may not be something that performed on a regular basis.
SCH E income - Passive income is reported on SCH E. Passive income can take several forms, such as dividends on stock investments, interest on a savings account or CD, as well as income derived from renting out real estate. It's the real estate rental income that gets reported on SCH E. This income is not "earned" in the since that you do not go out and "do something" to earn it. All you do is "sit there" and collect that income on a recurring basis - typically once a month.
Non-passive income that is reported on SCH C is subject to "regular" income tax, and the additional 15.3% self-employment tax. The SE tax is basically the employer's side of your medicare and social security. This income can be included for things like figuring your maximum allowable IRA contributions, and is included when figuring your maximum social security payment when you reach retirement age.
Passive income reported on SCH E is subject to the "regular" ordinary income tax, but is not subject to the self-employment tax. Passive income can not be used when figuring your maximum allowable contribution to an IRA and is not included when figuring the amount of social security you will qualify to receive upon reaching retirement age.
