AIPIS 134 - The Airbnb Tax and Short Term vs Long Term Rentals with CPA Brandon Hall

If you are using your buy and hold properties as short term rentals, through a company like Airbnb, you may be required to pay an additional 15.3% self-employment tax. Although it may seem like a gray area to you, the IRS considers it an active business and will take note of which schedule you are filing. Short term rentals require more of your labor and your time, which rarely gets accounted for when calculating costs. Considering all the aspects of short term rentals versus long-term buy and hold properties will shield you from future surprises.

Key Takeaways:

[2:34] Airbnb investors are running an active business, so the IRS imposes a 15.3% tax on the income.

[6:38] Maintenance on Airbnb properties are more time and labor intensive than a buy and hold property.

[13:18] Should Airbnb owners file a Schedule E or Schedule C at tax time?

[17:08] Are you able to depreciate the furnishings in an Airbnb rental and what is the De Minimis Safe Harbor?

[23:31] How many units do you need to qualify for the 500 material participation hours?

[27:11] Using segmented depreciation can help to depreciate your assets at a quicker rate.

[30:16] Cost segregation feasibility studies can run anywhere from $5,000 to $20,000.

[32:21] A home office is beneficial as it opens the door to many tax deductions.

Mentioned in This Episode:

Jason Hartman

reviews@jasonhartman.com

Hall CPA LLC