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Short term rental expenses and deduction
Hello,
I purchased a home in April 2023. It took me two months to furnish the move and move in. This home then became my primary residence. I put up one of the rooms on Airbnb and used a second room for storage of which most of the items stored there were for the Airbnb like extra sheets, guest supplies, cleaning supplies etc while I stayed in the third room.
The room is only ever used for Airbnb but occasionally I block some days when I will not be able to clean due to not being in town or something needs to be changed/fixed.
The average stay of each guest is well under 7 days ~3 nights per guest. I have put in well over 100 hours solely into the Airbnb even though I only started in July.
My understanding is that:
- I have full rental expenses like the tv, bed, furnishing, supplies I purchased for the room and x% expenses like mortgage interest, PMI, depreciation, home insurance, utilities, certain closing costs and real estate taxes where x% is the percentage of the home used for the rental. My questions are:
- Will the x percentage be calculated based on days listed combined with the percentage of home rented? e.g if the room is 500sq ft and the total home is 1500 sq-ft AND the room is listed (occupied or vacant) for 150 out of 200 days (because 50 days were blocked from me not being in town or unavailable to prepare the room), the percentage would 150/200 * 500/1500 leading to .33 * .75 which is 25%
- Should the blocked nights be counted as rental days since I didn't use it for personal use? Thereby eliminating the need for calculating what % of days was used for rental.
- Given I used an extra room for storage supplies for the other guest, can I include a percentage of that room say 50% into the percentage of the home used for rental?
- Since my average rental is less 7 days per guest and I have put in more than 100 hours:
- can I deduct net losses against my active income?
- The turbo tax online premium doesn't seem to let me input all this information: When I select short-term rental/vacation home (since my average rental is less than 7 days), I no longer get the option to choose a rental use percentage. Can the online portal not handle this scenario?
- Deductions:
- Can I take a percentage home office deduction since I have an office at home that I use to manage the Airbnb (but I also use it for other personal uses).
- Are my closing costs and homeowners' insurance deductible at a percentage for the Airbnb?
‎April 3, 2024
12:20 PM