TP owns a house(not his residence) that is used for AIRBNB all year. TP is not a realtor or a real estate agent. TP provides normal items and has a cleaning service clean after each guest leaves. It is a house sitting in the mountains. TP provides no other service. In TB news(1/10/2022) it appears TP may have to consider this as self employment income. my 2 questions: would you consider this as self employment income and what dep rate would you use? I am somewhat lost on this issue.
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Does your client provide substantial services, such as breakfasts, daily cleaning, etc.? -
I have a client who has a second home that is rented through AirBnb during the summer months and I think AirBnb has a contract service (paid by the landlord) that provides for cleaning, housekeeping services during the rental period. My client does not live in the same state and does not provide any food etc.
Based on his involvement we determined that it should go on Sch E and not Sch C.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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That referenced TB Tax News article "Vacation Property Rental Subject to Self-Employment Tax" does a good job of discussing the difference between providing (and charging) for services subject to self employment, and simply providing cleaning to keep the property suitable for rental. Hint: it has nothing to do with whether or not the activity is a passive activity.
"Generally, services are considered rendered if they are primarily for the convenience of the occupant and are other than those usually or customarily rendered in connection with the rental of rooms or other space for occupancy only."
It is always a matter of facts and circumstances, but with the limited facts provided in the OP, I would call it rental, not self-employment."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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TP does not provide services. Contracts' with cleaning service to clean and wash linen's as needed. In fact they also replace any missing items(dishes, pots and pans things that you would normally find in a BNB. TP even has to pay a rental tax. Now I still believe NOT subject to SE but do I use depr. for commercial or residential. I believe it has to be commercial rates. ThanksComment
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"do I use depr. for commercial or residential"
It is still residential property, so 27.5 years life."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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