Schedule C or E for Short Term Rental Taxes?

[Tommy Cheng]

Hello BP Family,

I've read so much on whether to file our STR as Schedule C or Schedule E when filing for 2022. This is what I gather:

Schedule E = Passive, No 15% self employment tax, No passive loss tax benefits

Schedule C = Active, Write off $25k in losses, 15% self employment tax

In our specific situation, our STR is our guesthouse on our primary residence. When tallying up expenses due to initial investments we have a Net loss of around $30k (unfortunately Texas doesn't allow carrying forward losses). Everything I've read says to file as schedule E, but I'm confused as I wouldn't be able to realize my losses for the year? Am I correct in my assumption? Any guidance would be greatly appreciated! Some numbers below:

Gross Op income = ~$46k

Expenses = ~$70k (furniture, construction, decor, utilities, mortgage interest %, etc)