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Common questions about entering rental and royalty property in ProConnect Tax

by Intuit•2• Updated 3 months ago

Get answers to frequently asked questions about entering rental and royalty income in the Individual module of Intuit ProConnect.

Follow these steps to enter rental or royalty income for the Schedule E, page 1:

  1. Go to the Input Return tab.
  2. From the left-side menu, select Income and choose Rental and Royalty Income (Sch E).
  3. Enter a Description of property.
  4. Under the Rental and Royalty Income (Schedule E) section, enter the Description of the property.
  5. 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.
  6. Select the appropriate Type of property (Click on arrow to select from list).
    • 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, the program will generate code 8 on Schedule E, per the form instructions.
  7. Enter the Number of days rented.
  8. Scroll down to the General Information section and complete any applicable fields.
    • ProConnect Tax 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.
    • ProConnect Tax considers royalties as non-passive activities. Enter a 2 in, 1= nonpassive activity, 2= passive royalty to change the royalties to passive
  9. Scroll down to the Other Information section.
  10. Complete any other applicable information about this activity.
  11. From the top of the screen, select the Income Statement section.
  12. Under the Income section, enter the Rents or royalties received.
  13. Scroll down to the Expenses section and enter any applicable fields.
  14. Click the + (plus sign) at the top of this screen for additional Schedule E properties.
  1. Go into the Input Return tab.
  2. From the left-side menu, select Deductions and choose Depreciation.
  3. Click on the Depreciation input screen.
  4. In the Quick Entry Grid, click the arrow in the Form field.
  5. Choose 3 = Schedule E (rental).
    • For a Schedule E (vacation home), select  11 = Schedule E (vacation home) instead. If 3 = Schedule E (rental) is chosen on a vacation home, the full depreciation adjustment will be allowed instead of being limited.
  6. Select the correct Activity name or number.
  7. For more inputs, click on Details at the far right to expand the input section.
  1. Go to the Input Return tab.
  2. On the left-side menu, select Income.
  3. Choose Rental and Royalty Income (Sch E) from the dropdown menu.
  4. Scroll down to the Other Information section.
  5. Enter the percentage in the Percentage of ownership if not 100% (.xxxx) field.

You can also enter a Percentage of business use (.xxxx) on assets in the Depreciation screen. However, you shouldn't use these two fields together, as this will cause an inaccurate reduction of rental income and expenses.

  1. Go to the Input Return tab.
  2. From the left-side menu, select Income and choose Rental and Royalty Income (Sch E).
  3. From the top of the screen, select the three dots and choose Passive Losses.
  4. Scroll down to the Prior Year Unallowed Passive Losses section.
  5. Under the Regular subsection, enter the Operating loss amount as a positive number.
  6. Under the AMT subsection enter the Operating loss amount as a positive number.

The program uses the AMT amounts to compute the passive activity adjustment on Form 6251. If you don't know the AMT amount, enter the regular tax amount in both the regular tax and AMT fields. This will prevent the program from computing an incorrect adjustment on Form 6251.

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