I lease multiple single family residences from others and turn them into short term rentals on Airbnb. I do not own any of the properties. I work this business full time. My 1099-Misc from Airbnb was near 300k for 2017.
Aside from the regular cleanings, my guests have access to basic breakfasts and I offer myself available 24/7 as a “concierge”.
I have large assets and leasehold improvements that I need to capitalize. For example, I have renovated a kitchen, 2 bathrooms, put in a new driveway, a new patio, and new copper plumbing.
1. Can I file this as a schedule C or must I file it as a schedule E?
I've received conflicting answers from the community as seen in the links below:
This one is telling me to file a schedule E: https://ttlc.intuit.com/questions/4357761
This one is telling me to file a schedule C: https://ttlc.intuit.com/questions/4361790
PLEASE HELP!
If you offer services, it is entered on Schedule C. In your Schedule E example above, you did not mention offering services. The answer was appropriate to the information given.
Depending on how you run your Airbnb business, you have to report your income on either Schedule C or schedule E. The distinction is based on how actively you are involved in running your Airbnb business and what services you offer.
Schedule E is meant for passive income. If you are just renting out a space and you do not offer any additional services (cooking, cleaning services, maid service etc) then you should report on Schedule E.
If you do provide services, like a hotel or B&B would, then you report on Schedule C.
The main difference between these schedules is that under Schedule C you are subject to self-employment tax and under Schedule E you are most likely subject to Passive Activity Loss Limitations, which means that your rental deductions cannot exceed your rental income. In other words, the IRS assumes you’re never running at a loss. If you’re not, then you can deduct up to $25,000 regardless of your income