I own a few residential rental properties in the United States. I actively manage all of them, although this is not my full-time job. The properties are owned by an LLC of which I am the sole member. I had a loss on the rentals for 2018, expect to break even in 2019 and hopefully have steady profit after that.
My accountant says I can choose to use either schedule C or schedule E to report the rental income/loss. I'm wondering about the tax advantages/disadvantages of each ones. (My accountant gave me his perspective but I'm asking here to get more ideas.)
Some specific questions include:
If I report on schedule C, I can get the 20 percent passive income deduction that was included in the new tax law, whereas I can't get that under schedule E, correct?
If I report on schedule C, can I put a portion of the rental income into a SEP IRA?
If I report on schedule C, do I lose the ability to carryover losses from year to year?
If I report on schedule C and pay self-employment tax on the rental income, will that entitle me to a higher social security benefit when I retire (assuming I don't already max out my social security benefit through other earned income)?
How much leeway do I have to switch between which schedule I use in different tax years? In other words, if I use schedule C this year, do I have to keep using it in future years?
I'd appreciate any other advice on the tax impact of using schedule C vs. E, especially with the new tax law in mind.