I purchased a condo in vacation area through a 1031 exchange. To maintain business use of the property, I elected to rent the condo using a management company that contracts with the HOA. I am not required to rent the unit as an owner, nor am I required to use the company associated with the HOA to rent or lease the property. Rentals are restricted to less than 30 days, however most guests/renters stay less than 7 days. The management company gets a percentage of the net rents after expenses to advertise, take rental information, collect rent, set fees, clean, do some basic repairs under $200 without need for owner approval, provide linen and towels and other guest services for renters of the property. I'm being careful to only visit the property once a month to make sure it is being maintained and cleaned well, and to do repairs and cleaning that the management company has not done. (learned my lesson not to be hands off due to bad prior experience with a management co. who let things go.) Will use for personal reasons no more than 14 days or less than 10% of days rented per year to keep this from being a second home/personal use. My question is, am I now in the vacation rental/hotel business with a schedule C? rather than using schedule E as I did for the single family home I rented before? What is the business code for schedule C if so. Do I need to 1099 the management company for the services it provides to me? Thanks.
