All Forum Posts by: Jeremy Janszen

As I continue to think about this, I suppose the cleaning fee is just another form of revenue and that revenue is being taxed.  Then I'm using that revenue to pay for service that has it's own tax.  The fact that AirBnB splits it out from the nightly revenue is more a matter of marketing (keeping my nightly rates lean) and logistics (one cleaning fee payment regardless of number of nights booked).  Calling it a cleaning fee (vs. revenue source) and treating it like a pass-through cost gave it the illusion of being a double-taxed service.

Hello! AirBnB automatically charges our guests their occupancy tax and that tax is on both the nightly rate and the cleaning fee.  We don't do the cleaning ourselves, but have a cleaning company take care of this after each stay.  However, our cleaning company charges us a sales tax for their fees -- which are the same fees we pass along to our guests.  So, is the tax for the costs of housekeeping for my AirBnB being charged twice at two different points in time (once when I pay the housekeeper and once when my guest reimburses me for paying the housekeeper)?  If so, is this right and/or how can I eliminate the double taxation on the same service?  Thanks for the guidance, as usual!

Hi all - I know this topic has been hit on a few times but I wanted to ask my question in a very specific manner to get collective expert feedback.  I understand I should consult my CPA, and I will.  They are, however, only 1 voice.  The collective feedback of this group is great support for my local professional opinions.  So, here goes....

I'm purchasing short-term rental and have been researching the tax implications/benefits of doing so. What I've come to understand, and would like to confirm, is the following, plus some follow-up questions:

If I own and directly manage a short term rental, renting it for an average of 7 day periods or less, it can be classified as non-passive income/loss and would be reported on a Schedule E (since there are no additional "substantial services" provided along with the rental). The rental income can be reduced by typical costs such as depreciation, mortgage interest, utility and operating costs, advertising costs, repairs, etc. If these costs exceed the rental revenue earned on the rental, the overall reported loss can be used to further reduce my W2 (day-job) generated taxable income. I do not have the IRS's "real estate professional" status.

If the above statement is accurate, my follow-up questions are as follows:

1. Is there a minimum and maximum number of days I must list the house for rent?

2. Is there a minimum and maximum number of days the house must be rented in order to qualify as a short term rental as described above?

3. Is there a minimum or maximum amount of days per year that I can use the house myself?

4. Do the number of rented days, and/or number of personal days use, affect the portion of annual costs I can deduct?

5. Can I show a Schedule E loss every year I own the STR, and thus reduce my W2/day-job taxable income each of those years, without the IRS reclassifying me as a "hobby" and thus unable to report a loss?

Thanks in advance for your thoughtful responses!

Based on everything shared here, I'm considering the following approach/conversation:

1. We can't afford to provide housing without rent. We're still responsible for the mortgage and all costs associated with owning and maintaining the property and the rental income is critical to covering those costs.

2. We consider housing to be a top priority bill and that other bills of lower priority should be reduced/eliminated first, if income is tight.

3. What is tenant doing (planning to do) to supplement income if they expect to have income loss?

4. What programs are out there to provide temporary relief (e.g. no interest loans, social programs, etc.) and help offset current costs?

5. The house is a 3br. Can tenant take on a (qualifying) roommate to help offset costs?

***What is the situation and what does tenant plan to do? This is the question I want answered, keeping the responsibility on the tenant.**

Based on tenant's plan, we could consider:

A) Since tenant is in good standing, if this is too expensive of a property we could let tenant out of lease early, without penalty.

B) Pay what you can for a month and defer the difference across the remaining months of the lease while tenant finds an alt source of income (this has to be part of the plan...can't just sit around and wait!).

Excellent feedback and discussion, all.  I appreciate this community.

They just closed Ohio schools for 3 weeks.  Parents who depend on their kids being in school so they can go to work will also likely be affected if they can't find free/cheap childcare during the days.  Just trying to stay ahead of the trickle-down effect of this and its impact on tenants ability to pay rent.  Quarantined patients won't be able to go to work for 14 days either.  No work, no pay in some cases.  One idea I had was allowing up to 2 months of deferred rent (with proof you have reduced/eliminated wages) to be absorbed into the remaining months of the lease term.  If the term is short, and tenant is in good standing, I might be able to turn this into a year extension and spread the 2 deferred months over a longer lease term so it's not too big of a monthly hit.  What are other ideas?  Or, are most landlords in the "hold firm to the lease" sentiment (which I can respect too)?  I can see the argument, that "I have to pay the mortgage. You have to pay the rent."

How are landlords managing the impact of Coronavirus on a tenant's ability to pay rent?  Due to quarantines, social distancing, etc., a lot of businesses, employees, and business owners are likely to have dramatically reduced income and wages.  I already have a tenant asking me what will happen if no one can come to his karate dojo for a month or two because of quarantine and he has no income to pay rent.  What arrangements are people making around this with tenants?  Uncharted territory.... Thanks for any ideas!

I've purchased 4 SFHs over the past couple years, each with a conventional 30yr fixed mortgage, and put each one into its own LLC and run all income and expenses through that LLC. Purchasing my 5th and the bank says, basically, "Hey, stop it." I know, technically, it's a violation of the loan agreement, but I also know that a lot of people do it anyways - for obvious reasons. My question is, if I leave the house (and future houses) out of an LLC, how do I set up the unique business entity? Do I need to lease the house from me to the LLC? What do other do? Thanks for the guidance.

Looking for recommendations for tax preparation in Cleveland.  We have SFHs in separate LLCs and want tax prep for each.  I know there's a lot changing out there with new tax law and want to get the best tax prep available.  Who are people using?  Thanks!

I'm an investor in Ohio, buying/renting typically SFHs and I'm starting to consider shifting some of the day-to-day work off my plate to focus on finding more deals/investors/etc.  I do not want to hire a property management company at this point, but rather hire an individual to help manage some of the non-contractual and non-money/rent aspects of the business (specifically:  showings, repair calls, tracking bills, tenant questions, etc.).  I would still sign all leases and collect all rents.  Can I hire a "leasing agent" (or something similar) on some sort of non-salaried terms without them being required to have their real estate license and/or be part of a brokerage, etc., etc.?   Much thanks for any Ohio investors who have first hand knowledge.