Updated October 18, 2026. Quick answer: Lines 12 to 19 are the second block of rental and royalty expenses: mortgage interest paid to banks, other interest, repairs, supplies, taxes, utilities, depreciation or depletion, and other expenses. Interest usually comes from Form 1098, depreciation from Form 4562 and repairs from your own records.
What lines 12 to 19 ask for
The form captions them as “Mortgage interest paid to banks, etc. (see instructions)”, “Other interest”, Repairs, “Supplies”, Taxes, “Utilities”, “Depreciation expense or depletion” and “Other (list)”. The first block of expenses is on Schedule E lines 5 to 11. The schedule as a whole is mapped on the Schedule E (Form 1040) page.
Lines 12 and 13: interest
The instructions open with a records rule: “In most cases, to determine the interest expense allocable to your rental activities, you must have records to show how the proceeds of each debt were used.” “In general, you allocate interest on a loan the same way you allocate the loan proceeds.”
For line 12: “If you have a mortgage on your rental property, enter on line 12 the amount of interest you paid for 2025 to banks or other financial institutions.” “If you paid $600 or more in interest on a mortgage during 2025, the recipient should send you a Form 1098 or similar statement by January 31, 2026, showing the total interest received from you.”
For line 13: “If the recipient was not a financial institution or you did not receive a Form 1098 from the recipient, report your deductible mortgage interest on line 13.” Prepaid interest has timing rules: “Do not deduct prepaid interest when you paid it.” “Points, including loan origination fees, charged only for the use of money must be deducted over the life of the loan.”
If a trade or business is involved: “Interest you paid as part of your rental real estate activity is not subject to the limitation on business interest unless your rental real estate activity is a trade or business.” In that case “you must file Form 8990 to deduct any interest expenses of that rental real estate activity unless you meet one of the filing exceptions in the Instructions for Form 8990.”
Line 14 and line 15: repairs and supplies
The instructions say “You can deduct the amounts paid for repairs and maintenance. However, you cannot deduct the cost of improvements.” “Repairs and maintenance costs are those costs that keep the property in an ordinarily efficient operating condition.” “Examples are fixing a broken lock or painting a room.”
On improvements: “improvements are amounts paid to better or restore your property or adapt it to a new or different use.” “Examples of improvements are adding substantial insulation” or replacing an entire HVAC system “Amounts paid to improve your property must generally be capitalized and depreciated”. Line 15, Supplies, is captioned on the form and falls under the general rule on Schedule E lines 5 to 11 that you can deduct ordinary and necessary expenses.
Lines 16 and 17: taxes and utilities
Line 16 is captioned Taxes. For royalty income the instructions say: “Include taxes withheld by the producer on line 16.”
For line 17: “You can deduct the cost of ordinary and necessary telephone calls related to your rental activities or royalty income”. The limit is “the base rate (including taxes and other charges) for local telephone service for the first telephone line into your residence is a personal expense and is not deductible.”
Line 18: depreciation or depletion
The instructions define it: “Depreciation is the annual deduction you must take to recover the cost or other basis of business or investment property having a useful life substantially beyond the tax year.” “Land is not depreciable.” On timing: “Depreciation starts when the property is available and ready for use in your business or for the production of income.”
The figure comes from Form 4562: “See the Instructions for Form 4562 to figure the amount of depreciation to enter on line 18.” The form is explained on the Form 4562 page. The attachment rule is “You must complete and attach Form 4562 only if you are claiming:” “Depreciation on property first placed in service during 2025;” “Depreciation on listed property” and “A section 179 expense deduction or amortization of costs that began in 2025.”
If you bought a building, the cost must be split: “you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings.” Selling a depreciated rental later is a different topic, covered on the depreciation recapture page.
Line 19: other expenses
The instructions say “Enter on line 19 any ordinary and necessary expenses not listed on lines 5 through 18.” The form asks you to list them: line 19 is captioned “Other (list)”.
Where it goes next
These lines join lines 5 to 11 in the total the form captions “Total expenses. Add lines 5 through 19”. Two of them also carry to the Part I totals: “Enter your total expenses for mortgage interest (line 12), depreciation expenses and depletion (line 18), and total expenses (line 20) on lines 23c through 23e, respectively, even if you have only one property.” Those totals are on Schedule E lines 23a to 26 and line 20 is on Schedule E lines 20 to 22. The return the result reaches is explained on the Form 1040 page.
Edition and line numbers
This page reads the 2025 Schedule E (Form 1040) and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are byte-identical to the archived copies and they are the files for the tax year 2025 return, filed in 2026. The schedule says “Attach to Form 1040, 1040-SR, 1040-NR, or 1041.” Schedule E has its own instructions booklet, titled “Instructions for Schedule E” (Form 1040). Check the tax year printed on the schedule you are filling in and use the line numbers on that year’s schedule, because a different year’s schedule can number or word its lines differently.
Common mistakes
- Deducting an improvement as a repair. The instructions say “you cannot deduct the cost of improvements.”
- Deducting prepaid interest in the year you pay it. The instructions say “Do not deduct prepaid interest when you paid it.”
- Depreciating the land. The instructions say “Land is not depreciable.”
Related: Schedule E (Form 1040), Form 4562, depreciation recapture, and Form 1040.
Sources
- Instructions for Schedule E (Form 1040), Supplemental Income and Loss (2025): https://www.irs.gov/pub/irs-pdf/i1040se.pdf
- Schedule E (Form 1040), Supplemental Income and Loss (2025): https://www.irs.gov/pub/irs-pdf/f1040se.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.