The complete tax guide for Airbnb and other short-term rental hosts
As a short-term rental host, you’re entitled to many valuable deductions and other tax benefits. This book―the first of its kind―shows you how to make the most out of your hosting business without risking problems with the IRS.
Learn everything you need to know about taxes, including:
what deductions you should be taking
how to report your short-term rental income
how to deduct losses and
vacation home and tax-free rental rules.
The book covers the new tax law, including the new 20% pass-through deduction. Whether you rent your property through Airbnb, FlipKey, HomeAway, TripAdvisor, Craigslist, or VRBO, you want to make sure you understand these tax rules.
This new edition is completely updated to cover the new Tax Cuts and Jobs Act.
Author(s): Stephen Fishman J.D.
Edition: 2
Publisher: NOLO
Year: 2018
Language: English
Pages: 208
Cover......Page 1
Title Page......Page 4
Table of Contents......Page 8
1: Introduction: Who This Book Is For......Page 12
2: How Short-Term Rental Hosts Are Taxed......Page 14
Income Taxes......Page 15
Social Security and Medicare Taxes......Page 22
Net Investment Income Tax......Page 25
Local and State Occupancy Taxes......Page 27
3: Tax-Free Short-Term Rentals......Page 30
Short-Term Rentals That Qualify for Tax-Free Treatment......Page 31
Effect of Qualifying for Tax-Free Treatment......Page 35
4: Deducting Your Expenses: The Basics......Page 38
What You Can Deduct......Page 39
How Your Tax Status Affects
Your Deductions......Page 41
Deductions for Multiple Owners......Page 46
5: Operating Expenses......Page 50
What Are Operating Expenses?......Page 51
Direct Expenses Deductible in Full......Page 52
Operating Expenses That Must Be Allocated......Page 62
6: Repairs......Page 70
Repairs vs. Improvements......Page 71
Deducting Repairs for Short-Term Room Rentals......Page 73
Three Safe Harbors......Page 74
Repair Versus Improvement: Analysis Under the Regulations......Page 81
How to Deduct Repairs and Maintenance......Page 83
When Guests Pay for Repairs......Page 84
Properly Document Repairs......Page 85
7: Deducting Long-Term Assets......Page 86
Depreciating Property Used in Your Rental Activity......Page 88
How to Depreciate Real Property......Page 89
Personal Property......Page 97
8: The Pass-Through Tax Deduction......Page 112
Your Rental Activity Must Be a Pass-Through Business......Page 113
You Must Have Qualified Business Income......Page 114
You Must Have Taxable Income......Page 115
Calculating Your Pass-Through Deduction......Page 116
Taking the Pass-Through Deduction......Page 120
Strategies to Maximize the Pass-Through Deduction......Page 121
9: Prorating Your Deductions......Page 124
Direct Expenses Are Fully Deductible......Page 125
Expenses That Must Be Prorated......Page 126
Calculating Personal and Rental Days......Page 129
10: Reporting Rental Income on Your Tax Return......Page 134
Most Hosts Use Schedule E to Report Rental Income......Page 135
Schedule E Line-by-Line......Page 136
Completing Schedule E When You Have a Rental Loss......Page 144
Hosts Who Don’t File Schedule E......Page 150
11: Filing IRS Form 1099 Information Returns......Page 156
When Someone Else Reports Your Rental Income to the IRS......Page 157
Reporting Payments You Make to ICs and Other Workers......Page 159
Back-Up Withholding for Independent Contractors......Page 163
12: Deducting Losses for Short-Term Rentals......Page 164
What Are Rental Losses?......Page 165
Which Rental Loss Rules Apply......Page 166
Vacation Home Rules......Page 167
Hotel Business Rules......Page 174
Regular Rental Activity Rules......Page 179
13: Record Keeping......Page 182
What Records Do You Need?......Page 183
Tracking Income and Expenses......Page 185
Supporting Documents for Your Expenses......Page 188
Property Usage Record......Page 196
Index......Page 198
Book Registration and Updates......Page 209
