What this line means
The sum of all expenses on lines 5 through 19 for each property. Each property column (A, B, C) gets its own total. This number is subtracted from rental income (line 3) or royalty income (line 4) on line 21 to calculate your net income or loss per property. If you have more than three properties, you file additional Schedule E pages and combine the totals.
Does this apply to you?
- You entered any expenses on lines 5 through 19 for a rental property
- You own multiple rental properties and need separate expense totals for each
- You filed additional Schedule E pages for properties beyond the first three
Easy to overlook
Mixed-use properties require prorated expenses If you use a property partly for personal purposes and partly for rental (vacation home, room rental), every expense on lines 5-19 must be prorated based on rental use percentage before entering the amounts. The personal-use portion is not deductible. A property rented 200 days and used personally 50 days has an 80% rental-use ratio. Total expenses should reflect only the 80% rental portion. 1 IRS Schedule E instructions — Line 20
Additional Schedule E pages must be consolidated If you own more than three rental properties, you attach additional Schedule E pages. Only the first page carries the totals to line 26. The expense totals from additional pages must be combined with the first page. Missing a page means those properties’ expenses are excluded from your total deduction. 2 General filing pattern — expense totals miscalculated across multiple properties
Watch out for this
Including expenses from a property you converted to personal use mid-year. If you moved into a rental property in June, only expenses from January through May (while it was a rental) go on Schedule E. Expenses from June onward are personal and nondeductible. The line 20 total should reflect only the rental period.
Footnotes
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IRS Schedule E (Form 1040) Instructions, Line 20. https://www.irs.gov/instructions/i1040se ↩
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IRS Schedule E (Form 1040) Instructions, Multiple Properties. https://www.irs.gov/instructions/i1040se ↩