I run an airbnb that has average rentals under 7 days. Per my understanding, this would be an exception, and this is not considered rental activity. For me to report my income or loss, I need to determine if my activity is 1- trade of business activity and 2 - whether I materially participate in the activity. If I meet both of these tests, my loss from the airbnb qualifies as non passive and can be used to reduce any other non passive income (IE W2).
Is this understanding correct?
