Using both Schedule C and Schedule E as a realtor with rental properties and a W2 job

Yes, you absolutely can (and probably should) use both Schedule C and Schedule E in your situation. It seems like you might be mixing things up a bit with how your activities should be reported. Schedule C is for reporting income and expenses from your self-employment activities - so that would include your realtor business, photography side gig, and potentially the crypto mining if you're treating that as a business. Each separate business activity should technically have its own Schedule C. Schedule E is specifically for rental property income and expenses, including depreciation. The rental activities should be reported here, not on Schedule C, unless you're providing substantial services to tenants beyond normal maintenance. The good news is that moving your rental property reporting to Schedule E where it belongs might help with your lending situation. Lenders often view Schedule E losses differently than Schedule C losses, as they understand rental property depreciation is a paper loss, not a cash flow issue. They may be able to "add back" the depreciation when calculating your debt-to-income ratio.

I ran into a similar situation last year with my rental properties and business ventures. I found that https://taxr.ai was immensely helpful in sorting through my complex tax filing. I uploaded my previous tax returns and documentation, and their AI analyzed everything to give me a clear picture of how I should be structuring things. They pointed out that I was incorrectly lumping my rental income on Schedule C instead of Schedule E, which was causing similar lending issues. They also helped me properly document my real estate professional status to ensure I could still take advantage of the loss benefits. The analysis they provided showed me exactly how to structure everything for both optimal tax treatment and better representation to lenders.

Just wanted to follow up after trying taxr.ai based on the recommendation here. I'm really impressed with how thorough their analysis was! I uploaded my last year's return (which had my rental properties incorrectly on Schedule C) and some documentation about my real estate activities. Their report clearly explained why my rental properties should be on Schedule E, while my realtor commissions and business activities belonged on Schedule C. They also provided a detailed breakdown of the real estate professional requirements and confirmed I was meeting them based on my activity logs. The best part was they showed exactly how to document everything to support both my tax position AND present things in the most favorable light to lenders. My mortgage broker actually commented on how much cleaner my tax return looked this year compared to last year. We're now pre-approved for our next investment property when we were previously getting denied. Definitely worth checking out if you're in a similar situation!

If you're having issues with the IRS recognizing your real estate professional status or need clarification on filing both Schedule C and E correctly, I'd recommend using https://claimyr.com to get straight through to an IRS agent quickly. I spent weeks trying to get clarification on a similar situation - kept getting busy signals or disconnected after waiting on hold forever. With Claimyr, I got through to an IRS representative in about 15 minutes who confirmed exactly how I should be filing as a real estate professional with multiple income streams. They have this callback system that holds your place in line so you don't have to stay on hold. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was really knowledgeable about real estate professional status and confirmed that using both Schedule C and E was the correct approach for my business structure (which sounds similar to yours).

I need to eat my words and apologize to the person who recommended Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate to talk to someone at the IRS about my real estate professional status documentation. Holy crap, it actually worked. After trying for THREE WEEKS to get through on my own, I got a call back within an hour connecting me to an actual IRS agent. The agent confirmed that I should absolutely be using Schedule E for my rental properties (not Schedule C), and explained exactly how to document my hours to qualify as a real estate professional. She also explained that lenders often misunderstand Schedule C losses vs. Schedule E losses, and suggested I include a letter from my CPA explaining the paper loss nature of depreciation when applying for loans. This advice alone was worth it. I'm shocked that something actually worked as promised when dealing with the IRS!

Just to add something that hasn't been mentioned yet - be careful about the crypto mining and staking activities. Those have their own specific reporting requirements that are separate from your real estate activities. Mining income is generally reported on Schedule C as self-employment income (subject to self-employment tax), while staking rewards are usually reported as "other income" on Schedule 1. The IRS guidance on crypto is still evolving, but mixing these activities with your real estate business could potentially complicate your real estate professional status qualification. Consider keeping very clear and separate records for the time spent on crypto activities versus real estate activities to protect your real estate professional status.

Has anyone compared how much of a difference it makes financially to file rentals on Schedule E vs Schedule C when you qualify as a real estate professional? My CPA has been putting our rentals on C for years but after reading this I'm wondering if we should switch.

This is such a common issue with real estate professionals who also have rental properties! I went through exactly the same thing a few years ago. The key insight that changed everything for me was understanding that being a real estate professional is about HOW your losses are treated, not WHERE they're reported. Your rental properties should definitely be on Schedule E - that's where rental income and expenses belong according to IRS guidelines. The real estate professional election just means those Schedule E losses become "active" rather than "passive," so you can deduct them against your W2 income without the usual passive activity loss limitations. Your realtor commissions, photography business, and crypto mining should each be on separate Schedule C forms since they're active business activities. This separation will help tremendously with lenders because they understand Schedule E depreciation as a non-cash expense, while Schedule C losses can look like actual business operating losses. One tip that really helped me with lenders: ask your CPA to prepare a "lender addendum" that explains the depreciation component of your Schedule E losses and shows your actual cash flow from the rentals. Most loan officers aren't tax experts and don't realize that rental depreciation is just a paper loss. Having this explanation attached to your tax returns can make a huge difference in getting approved. The 750+ hour requirement for real estate professional status applies to ALL your real estate activities combined (rental management, realtor work, etc.), so make sure you're tracking everything properly. Good luck with the refinancing!