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Nava
Level 1

Net investment income tax

I am renting out MIL unit on Airbnb, it is all short-term, I am actively involved in managing this process. Can this be considered non-passive activity and not be subject to net investment income tax? 

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2 Replies
Anonymous
Not applicable

Net investment income tax

this is from Airbnb https://assets.airbnb.com/eyguidance/us.pdf

 

12. How is (net) rental income taxed (Federal)
....
If you are required to report income and expenses from your rental activity on Schedule C, you may be
subject to self-employment tax. If you are required to report income and expenses from your rental
activity on Schedule E, you may be subject to Net Investment Income Tax. Please consult your tax
advisor for more details on your specific circumstances.

 

 

unless you are providing substantial services like a hotel, in which case it would be reported on schedule c and be subject to self employment tax, it gets reported on schedule E and if your income is high enough subject to the net investment income tax 

Nava1
Returning Member

Net investment income tax

I report Airbnb income on Schedule E.  

There is also HR block guide which deems short-term rental with average rental period less than 7 days as non-passive activity. But silent about NII tax implications.

https://www.hrblock.com/tax-center/wp-content/uploads/2018/05/airbnb-taxes.pdf

 

 

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