All Forum Posts by: John Malone

@Joel Oh likely yes. Most of our arbitrage clients are Sch E

@Jeff Klonowski interesting! From a tax perspective the partners will have passive losses even if it is run as a STR.

@Joel Oh IRC 469 and 1402 are not "tied at the hip". IRS CCA pretty much came out in 21 and confirmed Sch C is incorrect for MOST STR owners unless you provide substantial services.

@Ian Tyndall there is no such thing as "STR REPS Status" to be clear.

https://www.biggerpockets.com/forums/530/topics/1056436-clearing-up-confusion-on-tax-treatment-of-short-term-rentals

@Lori Sullivan 2024. Your startup expenses will be capitalized and amortized.

@Angelo Cortez schedule E. It can be confusing, yes, but E it is for most!

https://www.biggerpockets.com/forums/530/topics/1056436-clearing-up-confusion-on-tax-treatment-of-short-term-rentals

@Amit Shukla here is a blog: https://www.anomalycpa.com/post/clearing-up-confusion-on-the-short-term-rental-tax-a-biggerpockets-top-post

@Michael Baum correct it is NOT a loophole. Short term rentals have existed well…forever! The laws have addressed this since the 80s

We routinely still review prospect returns, some prepared by the Big 4, where there is incorrect reporting!

The issue is many preparers have defaulted to Bed and Breakfast treatment which is usually incorrect for a normal STR.

@Chris Picciurro not sure its a slam dunk based on today’s reporting…

@Andrew Angell as the others mentioned, there is probably more specifics needed BUT interest income would be considered Portfolio income vs passive (or nonpassive) income unless you materially participating in this activity.

From these facts, I can’t see the interest being treated as passive though