Anyone reporting self-rental activity on Sch. E?

This is a common tax-saving strategy: A long-line truck driver is making payments on his tractor. He is leasing his tractor to his own S corp. The S corp is paying the operating/maintenance expenses. How does he report the lease income/expenses for interest, taxes, and depreciation? From previous discussion threads here, from the Sch. E Instructions, from Ch. 16 of the NCPE 2004 Tax Update Workshop, from Quickfinder (& similar references), it seems to me the option is Sch. C vs. Other Income/Adj. to Income. Seems like Sch. E is the wrong form to use. But a CPA friend of mine tells me that he's used Sch. E to report self-rental income/expenses, for 25+ years, with no IRS "response" at all. And p. 2-18 of the MSSP "Passive Activity Losses Reference Guide" says: "Under Treas. Reg. section 1.469-2T(f)(6), if a taxpayer rents real property or equipment to a trade or business activity (whether in the form of a partnership, S-Corporation, trust, etc.) net rental income from the property is treated as nonpassive income. While it is still reportable on Schedule E, it should not be entered on Form

Thanks, Rob Nyberg

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