If your rental is offering "services" such as maid service, prepared meals, transportation etc. then you need to report your bed and breakfast much like a hotel operation on Schedule C and you should have a place to enter 1099-K. If you just rent a furnished or non furnished place that can include utilities and provide no personal services other than making repairs or replacing an AC filter, you report on schedule E as usual and just set the 1099-K aside because it's not intended for that purpose. If it wasn't for the fact they lowered the threshold on 1099-K's to 600.00 or more you probably wouldn't even get one. The reason for lowering it was to include online merchants selling goods and services and being paid through electronic payment platforms and not paying taxes on their income. With the online vacation rental business booming with revenue, the 1099-K's the IRS also receives from the electronic payments processors like Airbnb or their affiliate used to send you rents they collected on your behalf will at least help the IRS make sure you are reporting rental income on your taxes too. So it's a tool for the IRS, but not something everyone will need to enter the figures on the 1099-K into their tax report if you file schedule E 'Rents and Royalties".
