How to enter a negative number on Schedule E, e.g., for a refund?

Forum|Forum|4 years ago
October 6, 2021
4 replies
52 views

We received an rental insurance refund which resulted in a net credit. I want to enter a negative number to reflect this credit, but Schedule E only lets me enter zero or positive numbers for expenses. How would I go about this?

Thanks,

- Rick

Carl

Level 11

That's not how you do it with rental property. All income received from all sources for any reason (as it relates to rental property) is reported as rental income. So you just include the rental insurance refund with the total rental income received.

RickG_123Author

Level 2

Ah! So it's reported as income rather than a negative expense. Very good - Thank you!

- Rick

Carl

Level 11

So it's reported as income rather than a negative expense.

Yes. When you originally paid the insurance (which was most likely paid from escrow by the mortgage holder) you claimed that amount as an expense. For example, you paid $1000 for the insurance.

Later, the insurance company refunded you say, $200 for example. But instead of sending that refund back to the escrow account, they sent it directly to you. Therefore, you report it as rental income of $200 in addition to all the other rental income received from the tenant.