Mark Kohler breaks down where different income types go on your 1040: stocks and crypto on Schedule D, business income on Schedule C, rental income on Schedule E. A common mistake is filing short-term rentals on Schedule C when they belong on Schedule E.
Humble Trader has a 1040 tax return. On your 1040 tax return, you're going to have different schedules. If you have a trader and you trade stocks or you trade crypto, you are going to file what's called a Schedule D, and you're going to report that on your 1040. If you have a small business like selling a product or a service, you're going to file a Schedule C. If you have a rental property, and that could be long-term or short-term, you're going to file Schedule E. Now I do what's called a trifecta Where we want to put your operational income on the left. So this could be your day job W-2, your little side hustle LLC, and it all comes down here to your 1040. That's great. But when you have passive income, this is long-term income. It's not short-term income. It's going to go over here and you might think of a rental property and it's going to come down on your 1040. This might be a Schedule C. This might be a Schedule E. It's not rocket science. You know more than freaking 50% of America just by understanding this diagram. Now, Humble Trader says, Mark, I have an STR and a day job, no side hustle. Because it's short-term rental, you think, 'cause it's short-term, it should be over here on a Schedule C. Wrong. All short-term rentals still go on a Schedule E. That's how it works, humble trader.
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