@candycanepanda wrote:
Does this change your answer at all regarding placing vacation rentals into schedule E ?
No. The issue is whether the income is passive or nonpassive. The rental income and expenses derived from the vacation rentals are reported on Schedule E unless you provide substantial services to your renters.
See https://www.irs.gov/publications/p527#en_US_2020_publink1000234065
If you are a real estate professional and materially participate in your rental property(ies), then losses from that rental activity are nonpassive (i.e., can be deducted from income other than only passive income).
Further, per Section 280A, if you use the vacation rental as a residence, which is defined as using the property for personal purposes for a number of days which exceeds the greater of 14 days, or 10 percent of the number of days during such year for which such unit is rented at a fair rental, then the profit/loss is nonpassive.
