Which schedule includes supplemental income and loss?

Schedule E is the correct answer because it is specifically designed for reporting supplemental income and loss. This schedule is commonly used by individuals who earn income from various sources outside of ordinary wages, such as rental income, royalties, and income from partnerships and S corporations. The term "supplemental income" in this context refers to income that is not derived from traditional employment but rather from additional sources that require their own reporting.

By using Schedule E, taxpayers can report not only their rental income but also any losses associated with these income-generating activities. This is particularly relevant for real estate investors or those involved in partnerships, where financial results other than salary or wages need to be accounted for.

Schedules C and F serve different purposes; Schedule C is for reporting income or loss from self-employment, while Schedule F pertains to profit and loss from farming activities. Schedule D, on the other hand, is used for reporting capital gains and losses from sales of investments. Thus, while all these schedules cater to different aspects of income reporting, Schedule E uniquely addresses supplemental income and loss.