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Updated almost 2 years ago,
Short-term versus long-term
Hey everyone!
Fairly new to rental real estate.... As we started preparing taxes and looking to the future, I came up with a question that maybe somebody on here can help with. As I understand it, short-term rentals are handled a little differently than long-term rentals as far as tax codes. The big question I have is, how is a property handled when for 4 to 5 months a year it's short-term but then we rent it over the winter as a long-term for 7 to 8 months? Does that need to be separated and part of it would be considered active income and the other part passive income? Or, doing the math, when you average length of stay per tenant over the entire year, it's well over the seven day mark that as I take is the mark for short-term versus long-term rental...
I know this should be directed to my tax professional but just wondering if anybody else come across this....