The TaxAct® program supports the entry of up to 48 rental properties on Schedule E (Form 1040) Supplemental Income and Loss in a return. If you have more than 48 properties to report, the following workaround will enable you to accomplish that (please note, you would be required to paper file the return):
This procedure is necessary in order for Form 8582 Passive Activity Credit Limitations to calculate properly.
Note. You may first need to determine whether this information should instead be reported on Schedule C (Form 1040) Profit or Loss From Business as business income.
Per IRS Publication 527 Residential Rental Property (Including Rental of Vacation Homes), on page 12:
Schedule C (Form 1040 or 1040-SR), Profit or Loss From Business
Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer.
Providing substantial services. I. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services don’t include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For more information, see Pub. 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in chapter 5 of Pub. 334.
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