Additionally, Airbnb reports any cancelled or refunded bookings as income on the 1099k. A bit confusing how to note this on Sched. E. Should it be expensed under Misc Expenses with a descriptor of "Cancellations/Refunds"? Thats also where I plan on putting the 3% service fee expense.
To get a better idea of what is going on...
If someone books and then cancels before arrival, the full amount you would have received for that reservation is still reported as income on the 1099k regardless of cancellation fees policy. I'm assuming this is because Airbnb collects that payment at the time of booking, and conveniently gets to let it sit on their books. When its cancelled they have to account for that and just pass it on to us.
