Income or Loss From Rental Real Estate and Royalties

Use Part I to report the following.

• Income and expenses from rental real estate (including personal property leased with real estate).

• Royalty income and expenses.

• For an estate or trust only, farm rental income and expenses based on crops or livestock produced by the tenant. Estates and trusts do not use Form 4835 or Schedule F (Form 1040) for this purpose.

If you own a part interest in a rental real estate property, report only your part of the income and expenses on Schedule E.

Complete lines 1a, 1b, and 2 for each rental real estate property. For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property.

If you have more than three rental real estate or royalty properties, complete and attach as many Schedules E as you need to list them. But answer lines A and B and fill in lines 23a through 26 on only one Schedule E. The figures on lines 23a through 26 on that Schedule E should be the combined totals for all properties reported on your Schedules E. If you are also using

page 2 of Schedule E, use the same Schedule E on which you entered the combined totals for Part I.

Personal property. Do not use Schedule E to report income and expenses from the rental of personal property, such as equipment or vehicles. Instead, use Schedule C if you are in the business of renting personal property. You are in the business of renting personal property if the primary purpose for renting the property is income or profit and you are involved in the rental activity with continuity and regularity.

If your rental of personal property is not a business, see the instructions for Schedule 1 (Form 1040), lines 8l and 24b, to find out how to report the income and expenses.

Extraterritorial income exclusion. Except as otherwise provided in the Internal Revenue Code, gross income includes all income from whatever source derived. Gross income, however, does not include extraterritorial income that is qualifying foreign trade income under certain circumstances. Use Form 8873 to figure the extraterritorial income exclusion. Report it on Schedule E as explained in the Instructions for Form 8873.

Chapter 11 bankruptcy cases. If you were a debtor in a chapter 11 bankruptcy case, see Chapter 11 Bankruptcy Cases under Income in the Instructions for Form 1040.

Income you report on Schedule E may be qualified

TIP business income and entitle you to a deduction on Form

1040, 1040-SR, or 1040-NR. See the Instructions for Form 8995-A for more information about this deduction.

Line 1a For rental real estate property only, show the street address, city or town, state, and ZIP code. If the property is located in a foreign country, enter the city, province or state, country, and postal code.

Line 1b Enter one of the codes listed under “Type of Property” in Part I of the form.

Land rental. Enter code “5” for rental of land. For details about the tax treatment of income from this type of rental property, see Rental of Nondepreciable Property in Pub. 925.

Self-rental. Enter code “7” for self-rental if you rent property to a trade or business in which you materially participated. See Rental of Property to a Nonpassive Activity in Pub. 925 for details about the tax treatment of income from this type of rental property.

Other. Enter code “8” if the property is not one of the other types listed on the form. Attach a statement to your return describing the property.

Line 2 If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, mobile home, boat, or similar property.

For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use.

A day of personal use is any day, or part of a day, that the unit was used by:

• You for personal purposes;

• Any other person for personal purposes, if that person owns part of the unit (unless rented to that person under a “shared equity” financing agreement);

• Anyone in your family (or in the family of someone else who owns part of the unit), unless the unit is rented at a fair rental price to that person as his or her main home;

• Anyone who pays less than a fair rental price for the unit; or

• Anyone under an agreement that lets you use some other unit.

Do not count as personal use:

• Any day you spent working substantially full time repairing and maintaining the unit, even if family members used it for recreational purposes on that day; or

• Any days you used the unit as your main home before or after renting it or offering it for rent, if you rented or tried to rent it for at least 12 consecutive months (or for a period of less than 12 consecutive months at the end of which you sold or exchanged it).

Whether or not you can deduct expenses for the unit depends on whether or not you used the unit as a home in 2025. You used the unit as a home if your personal use of the unit was more than the greater of:

• 14 days, or

• 10% of the total days it was rented to others at a fair rental price.

If you did not use the unit as a home, you can deduct all your expenses for the rental part, subject to the at-risk rules and the passive activity loss rules, explained earlier.

If you did use the unit as a home and rented the unit out for fewer than 15 days in 2025, do not report the rental income and do not deduct any rental expenses. If you itemize deductions on Schedule A, you can deduct allowable interest, taxes, and casualty losses.

If you did use the unit as a home and rented the unit out for 15 or more days in 2025, you may not be able to deduct all your rental expenses. See Pub. 527 for more information.

Regardless of whether you used the unit as a home,