Should I report my Airbnb income under rental property/royalties or as self-employed income and can I combine it with my other self-employed income?

[janicew35]

I use much of the same equipment/vehicle and office space for both incomes and it's frustrating to try to beyond frustrating to divvy up these expenses between the two.

[AnnetteB6]

Unless you provide significant services to your Airbnb customers such as what a hotel would provide (daily cleaning, meals or breakfast for example), then it is not appropriate to report that income as a Schedule C self-employed business.  It should typically be reported on Schedule E as Rental Income and Expenses.  

The only expenses that you should need to divide between Schedule C and Schedule E would be your vehicle expense.  There is not a provision to claim a home office associated with Schedule E.

[janicew35]

What if I qualify as a “real estate professional” for this property. Can I them deduct office expenses? It’s a large property with 3cabins and a heated pool - I don’t provide daily services except for pool and hot tub cleaning when guests are there- I also provide coffee, toiletries etc like a hotel would.

[AnnetteB6]

No, qualifying as a 'real estate professional' does not qualify you to claim home office expenses.  The real estate professional qualification is related to possibly being able to claim rental losses that you otherwise would not be able to claim. 

All qualifications for claiming an office in your home are tied to having a Schedule C business, not a Schedule E rental property.  There is not a home office deduction tied to Schedule E for rental properties.

For more clarification about whether you should use Schedule E or Schedule C for your rentals, take a look at the following TurboTax help article.  Be aware that if you report your rental income and expenses on Schedule C as a business, then you will be subject to self-employment tax on the income.

Should I report my rental on Schedule E or Schedule C?

@janicew35

[janicew35]

Thank you - seems like I could arguable go either way. Your answers were very helpful!