Airbnb - Active or Passive - Deductibility of Losses Schedule C

[Craig Lessler]

I have a long term rental (SFR) which I converted to an Airbnb in October 2019. My property manager is acting as the host and we have already had multiple bookings.

Questions:

1. Is the Airbnb considered "Active" so that it is reported on Schedule C instead of on Schedule E as a passive activity?

2. Provided I am to report the Airbnb activity on Schedule C, can I use the net loss (from painting, decorating, repairs, purchase of washer, dryer, furniture, bedding, linens, towels, etc) for 2019 on this activity against other active income such as W-2 income?

Thank you for input.

[Eamonn McElroy]

(1) The IRS has taken no such position.  You're welcome to provide a link that reinforces your statement.

(2) I'm much less concerned about what position the IRS takes than what position my clients can support under authoritative guidance.  IRC Sec 1402 and the related Treasury regs govern income subject to SE taxes.

(3) No such thing as "active" income in the context of IRC Sec 1402 and 469.

Again, most Airbnb and VRBO belong on Sch E and are not subject to SE taxes.  Consult your tax advisor.