I did not say advertising on VRBO/Airbnb online market place sites who processes electronic payments on your behalf automatically makes you a business. All I said is, IF you are in the classification of a "Short Term" rental, which is renting for less than 30 day stays (nightly/weekly), you will be considered in the category the same as Hotels/Motels and BNB's (bed and breakfast) due to it's transient nature and are also required to charge the same hotel tax rates too. Those are defined as being in the Hospitality Business. States changed zoning laws to accommodate the booming short term rentals they facilitate in exchange for the online vacation rental market place collecting and remitting sales tax to them, now the feds want to make sure they get their taxes too. There are of course long term "vacation" rentals advertising on those sites too that rent strictly by the month or more and do not fall in that class. I haven't used those platforms since they started charging booking fees and wanted to take control of too much plus I'm not a short term rental either and they made a mess of the monthly quotes they gave people because they use a average nightly rate to figure it when a month could be 28, 30 or 31 days and they would have to put in an end date of another night into the next month. I only use an online rent processing app for my rentals to submit their rent, but they all will issue 1099-K if they transferred over 600.00 to you effective tax year 2022.
I agree with all you points except I don't think I suggested if you advertised on the online Vacation Market places you must file schedule C. But 1099-K can only be reported on Schedule C not on E. I have contacted both Rent payment app and the bank Vendor services that I am not a Merchant, but they insist they have to send me a 1099-K. I finally came to the conclusion because I have refundable security deposits and refundable cleaning deposits remitted online and that because I report on schedule E, I will just file the 1099-K with my copy of tax records and forget about it. The IRS has a mess they created to deal with. I guess if the IRS gets the 1099-K too, they can cross check to see if large electronic transactions are not being reported, they will just have to audit me then because I have done the research and feel I am properly reporting my rental income on Schedule E and will continue to do so without using anything in my reporting from the 1099-K as it was suggested to take an expense deduction for Security Deposits which is even worse and most likely be flagged. I used Zelle at one time before 2022 where a tenant could just transfer their rent to my account but it allows a tenant to make a partial payment making it difficult to evict and I don't use it anymore. I'm not sure how PayPal and Zelle etc will handle this new IRS requirement, well see I guess.
