Enter two family rental on Sch E seperatly

[skyworks]

Hi,

A client keep track and report incoem & expenses for each unit  (of two family) seperately on Sch E for 2018 & 2019.

Rents, renovation and most expense  - based on each units

Depreciation, land cost, insurance and mortgage spility 50% and 50%

Should I combine the two units into one property on Sch E of  2020 return?

If yes, do we need to amend 2018 & 2019 returns?

Anyone has any experiences?

[itonewbie]

If it's a duplex, I'd keep reporting those as separate units.  It also helps if your client ever sells one unit and keeps the other, or retires one to move in as his/her residence, etc.

[skyworks]

Hi itonewbie,

thanks, it is duplex.

I agree it is better to separately report on Sch E in case they do condo conversion or move into one unit.

But mortgage loan person question why report separate

[itonewbie]

That can be easily explained.  Everything is above board and consistent with tax law.  Perhaps the question to that person is why this should be a concern.

[IRonMaN]

Didn't Art Linkletter used to have a television show called "Mortgage Loan People Say the Darndest Things"?

[itonewbie]

Your response reminds me of those old late night infomercials from a bygone era that ask people to buy programs that teach them how to get rich quick by buying foreclosed properties.