My CPA is new to me which is why I'm double checking her. She just completed corp returns and have yet to file individual. Her response to my email was "The passive income or loss is determined at the individual level so when completing personal return we can show as trade or business and not passive."
I'm good with my S-corp because I do other things in it too. But, now, I'm not at all sure about the STR income.
Can anyone point to the tax code for the definition of "substantial services"??
I thought it was active on the STR because I provide all furnishings, cooking supplies, maid cleaning before arrival, guest communication, towels/linens.
However, like Lisa Graesser said: "STR income is considered passive unless you provide significant services such as meals, activities or daily maid service like a hotel".
I'm now confused. Wonder if there is any other qualifying parameters for how this income should be considered?