You are allowed to treat AirBnb etc income as non-passive with certain limitations. However Intuit software doesn’t allow it so you have to try another competitor such as H&R Block Premium which does. Beware the accountants that tell you otherwise. I included the Tax Law reference for each item below and I’ve had 2 different Accounting firms confirm it.
1. Avg rental is 7 days or less IRC-469-1T(e)(3)(ii)
2. Owner uses property less than greater of 14 days or 10% of rented days Title-26, section 280A(d)(1)
3. Owner has to Materially participate and must show 100 hours of effort and more than anyone else . IRC-469-5T
4. Spousal time is included in the time threshold. IRC-469(h)(5)
5. You do not have to meet 500 hour threshold even if LLC if partners are General Partners as stated in LLC agreement and the partner served as General Partners for full year. IRC-469-5T(a)(e)(ii)
I have more backup material but I’m typing this on a phone because Intuit’s login to community is not working on computer. So apologies for the typos and brevity.
The key is you have to Materially participate and provide regular, substantial and continuous effort and more than your cleaners and other contractors. That doesn’t mean you have to provide service like a hotel but you have to put in the hours and do the repairs yourself etc.
good luck.
