@THBSr wrote:
- The average period of customer use for such property is seven days or less
I note that this provision regarding short-term rentals applies for purposes of one paragraph of the passive activity loss limitation.
would be reportable on Schedule C instead of Schedule E.
As you noted, the seven day rule ONLY has to do with if it is a passive activity or not.
The determination of Schedule E versus Schedule C has to do if Self-Employment Tax applies or not (if self-employment tax applies, it goes on Schedule C; if it doesn't apply, it goes on Schedule E).
Regulation §1.1402(a)-4 says that rentals from real estate is not subject to SE tax (and therefore Schedule E), unless "services" are provided (see subsection (c)(2); in which case it would go on Schedule C). The determination of SE tax (and therefore Schedule E versus Schedule C) has nothing to do with seven days.
https://www.law.cornell.edu/cfr/text/26/1.1402(a)-4
