Passive vs. Non-Passive Activity
Unlike traditional long-term rental properties that are considered passive activities by default, short-term rental properties are not considered rental activities if one of the following tests are met:
- The average period of customer use for such property is seven days or less;
- The average period of customer use for such property is 30 days or less, and significant personal services are provided by or on behalf of the owner of the property in connection with making the property available for use by customers
This means that if you have losses from a short-term rental business, and materially participate in the activity, you can use those losses to offset non-passive income (e.g. salary from a W-2 job) without qualifying as a real estate professional.
https://www.stessa.com/blog/short-term-rentals-and-related-taxes/
