I recently formed a single member LLC for income producing rentals that I inherited. I also have a W2 job. My question is can I simply attach Schedule E to my 1040?

[rachna]

The accountant I am hiring is telling me that I need to do either a Schedule C or become an Scorp. I don't want to do either-just want to use Schedule E.

[Anonymous_]

You would only report rental income on Schedule C if you are a real estate dealer or provide significant services to your renters.

See https://www.irs.gov/instructions/i1040se#en_US_2023_publink24332td0e1083

You would also report on Schedule C if you are in the business of renting personal property. Otherwise, you would report rental income and expenses on Schedule E.

[rachna]

Thank you! Now I need to convince the accountant I hired, although at this point I am thinking of continuing to do my own taxes.  I was afraid it would be too difficult for me with Turbotax.

[Anonymous_]

You might want to consult with a different local accountant (tax professional).

Holding rental real estate in an S corporation can be disadvantageous for a few reasons and there should be no issue with simply filing a Schedule E for the properties with your 1040. 

[rachna]

Thank you for your reply. Out of curiosity why is holding real estate in an Scorp disadvantageous?  Thanks.

[Anonymous_]

See https://www.thetaxadviser.com/issues/2020/oct/maze-real-estate-rentals.html

and

https://www.taxnotes.com/research/federal/irs-private-rulings/letter-rulings-technical-advice/s-corp...