I just read and searched that publication, and I see nothing with regards to your second sentence. Please enlighten me. And see this article <a rel="nofollow" target="_blank" href="
https://lisathetaxlady.wordpress.com/2015/02/06/income-received-for-serving-as-a-host-family/">https...>, which is what put me on to my way of thinking, although I came away with a different conclusion than she did, and I see that some others have, too.
The bottom line is at the top of the blog: "If the payments received are taxable, the logical question is whether the related expenses are deductible. The answer is 'it depends.' The first question to ask is if the income qualifies to be reported on a Schedule C, that is, is the activity of hosting an exchange student a trade or business? The IRS provides the following definition: 'An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business.' " We've been hosting students a year at a time for years, for the purpose of making money to put our own kids through private school, so yeah, it's a business pursuit, although we failed to write it off as such (and thus paid taxes on the whole amount) before these last two tax years, and it sure wasn't fair that we were being taxed on gross and not net income from hosting (because the extra food, utilities and auto expenses really add up).
