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mcpal
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Is VRBO (Vacation Rental by Owner) Income considered royalty income?

 
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DanielV01
Expert Alumni

Is VRBO (Vacation Rental by Owner) Income considered royalty income?

No, it's either considered rental income or self-employment income.  If you rented your home for 14 days or less, you will not need to report it at all.  However, if it was even for one more day, then you will need to report that income as rental income.  However, you will be allowed to take deductions as well.  Here are two TurboTax webpages that provide more information on this: How much tax on Airbnb income? (similar to VRBO) and 10 Tax Tips for Airbnb income

One important thing to keep in mind, however.  If you provide substantial services (similar to what you would find in a hotel, such as regular cleaning, changing linen, maid service, or providing breakfast or coffee), you are running a business instead of a rental activity.  A business (which is reported on Schedule C instead of Schedule E), is subject to self-employment tax (income that is taxable for Social Security and Medicare in addition to regular income tax).  Because many who have Airbnb or similar income provide services, Airbnb and similar income often will need to be reported on Schedule C.

Here is an FAQ which will help you to enter this information in TurboTax as rental income:   https://ttlc.intuit.com/replies/3288530  

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