Laws.com legal forms guide includes instructions for filing Schedule II for supplemental income and loss. 2. The IRS provides step-by-step instructions for completing this form. 3. Part one of step one is for reporting income and expenses from rental real estate, royalty income, farm rental income, and expenses related to crops or livestock. 4. For estates or trusts, only lines one and two need to be completed for all real estate properties. 5. If you have more than three rental real estate or royalty properties, attach additional Schedule A forms with specific instructions found in pages before through east six of the instructions. 6. Step two is for partnerships, joint ventures, or shareholders in an S corporation. 7. A Schedule K-1 should be received for reporting a share, and pages 7 and 8 provide specific instructions for part two. 8. Step three is for beneficiaries of an estate or trust reporting income or loss. 9. A copy of the Schedule K-1 from the fiduciary will provide instructions on how to report the items. 10. If estimated taxes are credited from a trust, put the ES payment claimed on line 37, and refer to page e8 for further instructions. 11. Holders of a residual interest in an REM IC should use part four to report their total share of taxable income or loss for each quarter. 12. A Schedule Q with instructions for each quarter should be received if you're the holder of one or more REM IC. 13. Attach a continuation sheet using the same format as in for C, referring to pages e8 through e9 for more instructions. 14. If your gross farming or fishing income for 2010 or 2011 was at least two-thirds of your gross income, you will not receive a penalty on line 42 of your tax return. 15. Make sure...