! purposes and you claimed a deduction in 2025 on

CAUTION Schedule 1-A (Form 1040) for the vehicle loan interest

allocable to your personal use, then you can’t claim a deduction for that same interest on Schedule E. See Schedule 1-A (Form 1040) and its instructions for more information.

Line 14 You can deduct the amounts paid for repairs and maintenance. However, you cannot deduct the cost of improvements. Repairs and maintenance costs are those costs that keep the property in an ordinarily efficient operating condition. Examples are fixing a broken lock or painting a room.

In contrast, improvements are amounts paid to better or restore your property or adapt it to a new or different use. Examples of improvements are adding substantial insulation or

replacing an entire HVAC system. Amounts paid to improve your property must generally be capitalized and depreciated (that is, they cannot be deducted in full in the year they are paid or incurred). See Line 18 , later.

Line 17 You can deduct the cost of ordinary and necessary telephone calls related to your rental activities or royalty income (for example, calls to the renter). However, the base rate (including taxes and other charges) for local telephone service for the first telephone line into your residence is a personal expense and is not deductible.

Line 18 Depreciation is the annual deduction you must take to recover the cost or other basis of business or investment property having a useful life substantially beyond the tax year. Land is not depreciable.

Depreciation starts when the property is available and ready for use in your business or for the production of income. It ends when you deduct all your depreciable cost or other basis or no longer use the property in your business or for the production of income.

See the Instructions for Form 4562 to figure the amount of depreciation to enter on line 18.

You must complete and attach Form 4562 only if you are claiming:

• Depreciation on property first placed in service during 2025;

• Depreciation on listed property (defined in the Instructions for Form 4562), including a vehicle, regardless of the date it was placed in service; or

• A section 179 expense deduction or amortization of costs that began in 2025.

See Pub. 527 for more information on depreciation of residential rental property. See Pub. 946 for a more comprehensive guide to depreciation.

If you have an economic interest in mineral property, you may be able to take a deduction for depletion. Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). See section 614 and the related regulations for rules on how to treat separate mineral interests.

Separating cost of land and buildings. If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it.

If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes.

Line 19 Enter on line 19 any ordinary and necessary expenses not listed on lines 5 through 18.

You may be able to deduct, on line 19, part or all of the cost of energy efficient commercial building property and energy efficient building retrofit property placed in service during the tax year. For details, see section 179D, Form 7205 and its separate instructions, and Rev. Proc. 2024-23, 2024-24 I.R.B. 580, available at [Rev. Proc. 2024-23](https://www.irs.gov/irb/2024-23_IRB#REV-PROC-2024-23" name = I.R.B. 2024-23.) .

Line 21 If you have amounts for which you are not at risk, use Form 6198 to determine the amount of your deductible loss. Enter that

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amount in the appropriate column of Schedule E, line 21. In the space to the left of line 21, enter “Form 6198.” Attach Form 6198 to your return. For details on the at-risk rules, see At-Risk Rules , earlier.

Line 22 Do not complete line 22 if the amount on line 21 is from royalty properties.

If you have a rental real estate loss from a passive activity (defined earlier), the amount of loss you can deduct may be limited by the passive activity loss rules. You may need to complete Form 8582 to figure the amount of loss, if any, to enter on line 22. See the Instructions for Form 8582 to determine if your loss is limited.

If your rental real estate loss is not from a passive activity or you meet the exception for certain rental real estate activities (explained earlier), you do not have to complete Form 8582. Enter the (loss) from line 21 on line 22.

If you have an unallowed rental real estate loss from a prior year that after completing Form 8582 you can include this year, include that loss on line 22.