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PA Schedule E
Line 6 - Net Profits (Loss) from Rents, Royalties, Patents and Copyrights

Remember: If you are filing a joint return and you both have income or losses in this class, you may only offset your own net income and losses – not your spouse’s -- in determining the amount to report on line 6.

Caution
If you rent or lease your property, but do not intend to realize a profit, you may only deduct your rental expenses up to your rental income. You may not claim the loss.
If you rent or lease your property to realize a profit, read the description of Rents or Net Profit from the Operation of a Business below to determine if you have a business activity that you should report on PA Schedule C.
Important: PA follows the IRS “not for profit activities” guidelines if you rent or lease your property, but do not intend to realize a profit. Therefore, you may only deduct your rental expenses up to your rental income, and you may not use a loss.

If you rent or lease your property to realize a profit, read the description of Rents or Net Profit from the Operation of a Business below to determine if you have a business activity that you should report on PA Schedule C.

PA rules generally follow the federal rules for determining the net income or loss realized from the rental of property.

Part A. Property Description Lines A, B, and C. For rental real estate, enter the street address, city or town and state. For other tangible personal rental property, enter the type of property. Enter the source of the royalty, patent, copyright, or similar property income.

Part B. Enter the corresponding initial of the property from Part A. Indicate the ownership of the property by filling in the appropriate oval:

T = taxpayer
S = spouse
J = joint ownership

Gross Receipts
Enter the gross receipts from the rental of real estate or other tangible personal property.
If you received services or property as rent, report the fair market value of such services or property as rental income.
Enter the gross receipts received as royalties from oil, gas, or mineral properties.

Total Expenses, Lines 4 through 17, will be calculated for you.

Net Income or loss will be calculated for you and carried forward to Line 6 of your PA-40.

Note: Pennsylvania does not follow federal rules regarding At-Risk Rules or Passive Activity Loss Rules.

For additional information on reporting your Schedule E income, refer to the PA-40 booklet online at www.revenue.state.pa.us.

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