Hi Mary,
I'll quote your very helpful answer above for clarity;
No, you must provide more than basic services to tenants. Housekeeping, linen service, maid service and meals are examples of substantial services that would require a landlord to use Schedule C. In essence, once you start providing substantial services, you're not just renting property; you're running a hotel or boarding house. Those count as businesses -- thus the requirement for Schedule C. Landlords must also use Schedule C if they rent property as part of their business as a real estate dealer.
Our city requires us to have a business license to do short term rentals under 30 days. I've seen that the IRS rule is that the average rental period is less than 7 days (if no substantial services are provide). Our average rental period was between 7 and 30 days. https://www.taxpros.org/blog/short-term-rental-special-treatment/41678 . We did a schedule C for our first year, 2019. Does any of these facts require us to do a sched C for 2020; having less than 30 day average rental period, having been forced to obtain a business license, the fact that we filed sched C for 2019? Regarding the 2019 sched C, must we amend 2019 taxes to switch over to a schedule E for 2020?
The last question may make the others moot for 2020. If we provided basic staples for the kitchen like salt, sugar, etc., does that count as substantial services?
Thanks,
Glenn
