Quote from @Lisa Graesser:
Quote from @Gulliver R.:
So income wise I report to the IRS the money that is paid out to me from Airbnb and VRBO in my bank account. And deductible wise: I’m just expensing the hosts fees and other tax deductible things.
The amount paid out to you into your bank account would have already deducted the host fees charged to you from vrbo or airbnb, this is probably what John was referring to.
It's worth noting that most people do this wrong on their taxes, or at least that's what I was told by my STR-specific CPA.
Airbnb reports your pre-fee revenue to the irs, NOT the payout amount. Of course if you just report your payout amount (which already has the fee taken out) you'll still pay the correct amount of taxes, but the Airbnb revenue you report in that case will not match the Airbnb revenue that Airbnb is reporting for your account, which could throw up a flag.
IE if you make $10,000 in revenue (nightly rate + cleaning fee) and get $9700 in payouts after the 3% fee, Airbnb reports that to the IRS as $10,000 in income. So technically to match you should be reporting it as $10,000 income with $300 in expenses for the fee. If you report it as $9700 income with no expense for the fee it still works out the same in the end, but the income number you're reporting will not match what Airbnb is sending the IRS.
EDIT: Not financial advice, this is just what my CPA, who works mostly with STR tax returns, told me.
