Common questions about individual Schedule E in Lacerte

Below are instructions on entering rental and royalty income from the Schedule E in the Individual module of Lacerte.

Table of contents:

How do I enter rental or royalty income?

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Under the Rental and Royalty Income (Schedule E) section, enter the Description of the property.
3. Enter the address Information in:
   • Street address
   • City
   • State
   • ZIP code
   • Region / ZIP code / Country (if located in a foreign country)
     • The address is only required for rental real estate properties. For royalty properties, you should leave Schedule E, line 2 and the address portion of line 1 blank. Enter code 6 for royalty property.
4. Select the Type of property (Ctrl+T) from the dropdown menu.
   • Refer to the IRS Instructions for Schedule E for a definition of Self-Rental and Other.
   • If you choose Royalties, the address won't show on the Schedule E, per the IRS instructions.
   • If you don't choose a type of property and instead enter Other type of property, Lacerte will generate code 8 on Schedule E, per the form instructions.
5. Complete any other applicable fields in the General Information section.
   • Lacerte considers rentals as passive activities with active conduct of a trade or business. Check the box labeled Did not actively participate to indicate that a rental is non-passive with no active conduct.
6. Scroll down to the Income section and enter the Rents or royalties received.
   • The program will determine if the amount relates to rents or royalties based on the Type of property selected in step 4.
7. Scroll down to the Expenses section and enter any applicable expenses that pertain to this activity.
8. Scroll down to the Other Information section and complete any other applicable information about this activity.

Back to Table of Contents

How do I enter fair rental days?

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Locate the Rental & Royalty Income (Schedule E) section.
3. Enter the days in the Number of days rented field.

Back to Table of Contents

How do I enter personal use days?

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Scroll down to the Personal Use of Dwelling Unit (Including Vacation Home) section.
3. Enter the amount days in the Number of days personal use field.
   • Use this field for any personal use days, even if this wasn't a vacation home.
   • If this was a vacation home, refer to this article for more information.

Back to Table of Contents

How does Lacerte calculate depreciation for Schedule E?

When you have multiple assets linked to the same Schedule E, the fastest way to review their depreciation is on the current year Federal Depreciation Schedule the program produces. 

Make sure that on Screen 18 you link assets to 3=Schedule E (rental) OR 11= Schedule E (vacation home). Refer to this article for more information.

Back to Table of Contents

Force D-30 to fill out with income less than 12,000

Form D-30 is not required to filed if the amount on line 10 is less than 12,000.  However, the entire form is needed due to a refund of estimated tax payments.

In Screen 54.321 enter 1 in input field Form D-30: blank=when applicable, 1=force. This will generate the entire calculation of the D-30.

Back to Table of Contents

How to enter Schedule E Rental Property Percentage of Ownership

To specify a percentage of ownership for a Schedule E Rental Property:

1. Go to Screen 18, Rental & Royalty Income (Schedule E).
2. Scroll down to the Other Information section.

   Note: In Lacerte 2012 and earlier years this field is located under the General Information section.

3. Enter the percentage in, Percentage of Ownership If Not 100 Percent (.xxxx) (code 500). Enter the percentage in .xxxx format, if less than 100% (e.g., enter 75% as .75).  Lacerte limits rents, royalties, and all expenses based on the percentage entered. The percentage will be applied on Schedule E, Part I, line 22.

   

Percentage of ownership can also be entered on a per asset basis on Screen 22, Depreciation.  Enter the Percentage of business use (.xxxx) in the Additional Information section of each asset not 100% used for the Rental.

Back to Table of Contents

Entering Passive Royalty Income for the Schedule E

To enter passive royalty income:

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Select the Royalty or click on Add from the left navigation panel.
3. Select Royalties from the Type of property (Ctrl+E) (code 802) drop down menu.
4. Scroll down to the General Information section.
5. Enter a 2 in, 1 = nonpassive activity, 2 = passive royalty (code 39).
6. Scroll down to the Income section.
7. Enter the amount in, Rents or royalties received (code 110).

To enter passive royalty income for 2010 and prior:

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Select the Royalty or click on Add from the left navigation panel.
3. Scroll down to the General Information section.
4. Enter a 2 in, 1 = nonpassive activity, 2 = passive royalty (code 39).
5. Scroll down to the Income section.
6. Enter the amount in, Royalties received (code 3).

Back to Table of Contents

How do I indicate a rental as real estate professional

Generally, rental activities are passive activities whether or not the taxpayer materially participates in them. However, if he/she is a real estate professional as set forth in IRC Sec. 469(c)(7)(B) Sec. 469. Passive activity losses and credits limited, rental real estate activities in which the taxpayer materially participates are not considered passive. For this purpose, each interest the taxpayer has in a rental real estate activity is treated as a separate activity unless he/she chooses to treat all interest in rental real estate activities as one activity.

To indicate a rental as real estate professional:

1. Go to Screen 18, Rental & Royalty Inc. (Sch. E).
2. Scroll down to the General Information section.
3. Check the Real Estate Professional (code 32) box

To make the election to treat all interest in rental real estate as one activity:

1. Go to Screen 46, Elections
2. Select Miscellaneous Elections in the left navigation panel
3. Check the Treat all rental real estate interests as a single activity [469(c)(7)(A)] (code 11) box