When it comes to rental activities, the decision to use Schedule C or Schedule E when filing your taxes depends on the nature of your rental activity. Here’s a general guideline:
Use Schedule C if you are operating your rental activity as a business with the primary purpose of making a profit and you are involved in the activity with continuity and regularity. This is typically the case if you provide substantial services to your tenants, such as in the case of a bed and breakfast or a hotel.
Use Schedule E for reporting income from rental properties where you are not actively involved on a regular and continuous basis. This is the common form for most rental property income which is considered passive.
For example, you would file Schedule C for your short-term vacation rental if:
The average guest stay is fewer than 7 days, or
The average guest stay is fewer than 30 days and you provide guests with “substantial services”
it could be that the commercial rental goes on schedule E (doubtful you would rent for short-term periods and/or provide substantial services while the opposite could be true for the residential property.
in any case, each property is reported in its own column or form
