Many people file their AirBNB income on Schedule E. That is where you will find the 27.5 year depreciation for a home.
Depending on how you run your Airbnb business, you have to report your income on either Schedule C or schedule E. The distinction is based on how actively you are involved in running your Airbnb business and what services you offer.
Schedule E is meant for passive income. If you are just renting out a space and you do not offer any additional services (cooking, cleaning services, maid service etc) then you should report on Schedule E.
If you do provide services, like a hotel or B&B would, then you report on Schedule C.
The main difference between these schedules is that under Schedule C you are subject to self-employment tax and under Schedule E you are most likely subject to Passive Activity Loss Limitations, which means that your rental deductions cannot exceed your rental income. In other words, the IRS assumes you’re never running at a loss. If you’re not, then you can deduct up to $25,000 regardless of your income.
