AirBnb Tax Questions

[Kyle R.]

Hi BP

I'm finishing up my first year as a vacation short term rental owner. I have a couple of tax questions that I want to familiarize myself with before I send everything to my CPA.

I rent my property through VRBO/Homeaway, Airbnb, and a local PM agency.

Question 1. My state, county, and town all have a occupancy/hospitality tax (similar to sales tax).

-VRBO allows owners to tack on Occupancy tax that gets directly passed through back to the owner to remit

-Airbnb collects the state occupancy tax and remits but does not collect on County/Local taxes and does not give the option for Hosts to charge an extra amount so basically the county/local taxes come out of the payout.

My question revolves around 2 options:

1. When you are disclosing Gross Sales on the Schedule E, should this include taxes paid to the owner that will be remitted later? And then a separate expense on the Schedule E with actual amount of Occupancy taxes paid. This option shows higher gross sales but also a higher amount of expenses.

2. Don't include Occupancy taxes as gross sales since theoretically they should all be pass through back to the government entities. In the expense line, only expense the additional taxes that were not collected but had to be paid out of pocket from rental payouts.

Question 2:

I know about the 14 day rules for classification of rental property vs personal home vs split. If the number of personal days for example is 10 and the total rental nights is 190, the total used nights is 200. Do we have to allocation expenses/depreciation to business and personal based on the % of 10/200? Or since it is under 14 days, are 100% of expenses and depreciation is deducted since it is a business property?

Also if any other hosts have year end financial performance templates that they would like to share that would be great!