- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Business & farm
One has to be really careful with short term rentals, as very few I've ever dealt with actually qualify as a SCH C business per IRS guidelines. If you've been reporting your rental income/expense on SCH E in the past, that would indicate to me that your setup does not qualify as a "trade or business" per IRS guidelines. At least, that was most likely true in the tax year it was set up as such. I'm not aware of anything that would change that now-a-days.
Providing substantial services.
If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C.
Key words are "primarily for your tenant's convenience"
The things you list:
I have a management company in Florida that maintains the calendar, takes calls from potential renters, does the billing, and has contracted maids, but my wife and I approve rent discounts, hire plumbers to fix shower faucets, pay the mortgage/electricity/AmazonPrimeVideo/HOA bills every month, purchase appliances when they fail and hire contractors to install them, and we go there several times per year to improve the unit (new paint, new furniture, scrubbing the tile floor and sealing the floor grout annually, new TV, etc.). We also seek out tenants.
None of that is done to be directly beneficial to the tenant. Cleaning between tenants is normal. You pay for utilities, HOA, etc. weather the unit is occupied or not. Appliances/plumbing/electrical problems get replaced/fixed when needed, regardless of occupancy. Scrubbing/sealing floors is normal cleaning/maintenance done weather there's a renter in it or not.
If you’re providing hotel-like perks such as regular cleaning or maid service (in excess of 10% of the rental cost), fresh linens or towels, in-room coffee, transportation, or sight-seeing, you’re providing substantial services and that put you closer to reporting on Schedule C.
I would highly advise you seek the services of a local tax professional in your area. One familiar with FL tax law is not really necessary beyond the extent of registering your partnership LLC in the state of FL. If the county/city/township where the rental is has any local laws or ordinances governing STR's, I'd expect you are already aware of it, as that comes into play too. (In my county within the city limits, STRs are required to be registered with the city and pay a yearly registration fee and pass yearly safety inspections, just like hotels do.)