Our sneaky duplex is a cozy, private guest suite tucked right inside our home.

Real estate, by default, is passive and the primary way to avoid the passive loss rules is to qualify as a real estate professional.Full-time employees and non-real estate business owners cannot qualify as a real estate professional (aka REPS status) because one of the tests is to spend more time in real estate than anything else (and it’s unlikely that you can convince the IRS or Tax Court that you spent more time in RE than your day job).

I have had failures in real estate when I was younger and those lesions are worth more to me then gold.

You always want to think about what the guests are looking for and tailor the property to that.

Having someone who has owned and operated a similar asset is worth its weight in gold. 

Hi - are there any scenarios in which mid-term rental income/losses can be considered as active income rather than passive, besides when one has REPS status?

Whether or not you allow pets, guests are bringing them. 

Focus on enhancing the guest experience, and check Lynchburg’s STR regulations for potential costs.2.

You just need to know how to background check your guests and how you want to accept payments.

If you didn't, seems like a bad / inexperienced accountant to suggest such a thing.In my opinion, its the same as telling someone to go to a trade school and get a new career.A STR can help you lower your taxes but I would only do it if you were planning to purchase a STR.A STR is a business, you are responsible for furnishing the house, responding to guests, providing a great stay and experience, etc