@AmeliesUncle wrote:
I disagree. It is not a rental activity FOR PURPOSES of Passive Losses. That does not necessarily mean it is not a "rental" for other purposes and needs to goes on Schedule C.
Actually, I am on your side; I believe that the "7-day or less" rule is applicable only with respect to passive losses and, absent substantial services rendered to the renters, I would report this as a regular rental property on Schedule E.
However, if indeed a taxpayer does have some sort of "vacation hotel", then that is a business and should be reported on Schedule C with a recovery period of 39 years.
Also note that the passive activity rules still apply even if the activity is reported on Schedule C, otherwise there would be no need for a "material participation" box on the form.
