I have a vacation property purchased in 2019 that became a rental in 2021. I can file my return using "not for profit " or Schedule E. Which is most advantegous?

[proyer04]

This property will be sold in 2022.  When I sell in 2022, I will have considerable gains which I would like to keep to a minimum.

[RobertB4444]

Because this is a vacation property and not a primary residence your taxable gains will be long term capital gains no matter which path you choose.  If you choose to go the schedule E route you will have some extra tax deductions against the rental income for the year (and a half?) that you have the property rented.  You will also have some depreciation for the same time period that will increase your gain next year.  

As far as the math goes, if you have any expenses for the rental then you should go the schedule E route.  You will have to take some depreciation in 2021 and 2022 (up to the date of sale) but the increase in gain on the sale in 2022 is offset by the deduction in 2021.  And the deduction this year offsets regular income - which the rental income is reported as - whereas the gain on the sale is taxed as long term capital gains.

[proyer04]

Thank you so much for your help.  My only concern about putting more income into 2022 is that the additional income could push us into the next bracket for IRMA with social security.

[RobertB4444]

The income has to be reported regardless of what you do.  If you decide not to report it on schedule E you have to report it as 'Other Income' on Schedule 1.  You get no deductions associated with that .  And the deductions will reduce your income.  So, I would go ahead and do that Schedule E.