We rent our basement through Airbnb. By law in Washington, DC, we have to register as a business to do so. Should income be reported on Schedule C or E?

[Anonymous]

Truly confused as to which form to fill out considering we technically have a business to rent the basement, but the income is solely related to rent.

[CherylW]

Either way, you'll need to upgrade to Turbo Tax Self-Employed.

Rental activity for Airbnb may be reported in two different areas of your tax return, for specific reasons, and with different outcomes.

Please review this article for a discussion of these options so you may choose the most appropriate place to report this on your return: http://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-your-home-airbnb-vrbo.html

 Most taxpayers chose to report Airbnb rental activity on Schedule E:

1. Click Federal on the left-hand side tab.
2. Click Income & Wages along the top.
3. Scroll down to Rentals, Royalties, and Farm, and click Show More.
4. Click Start or Revisit by Rental Properties and Royalties (Sch E) to report AirBNB as a rental property.

See this link for more:  Where do I enter income and expenses from a rental property?

If you provide services to your guests and choose to report your income from Airbnb as self-employment on Schedule C:

1. Click Federal on the left-hand side tab.
2. Click Income & Wages along the top.
3. Scroll down to Self Employment, and click Show More.
4. Click Start or Revisit by Income and Expenses.

See this link for more:  Where do I enter income and expenses from a business?

In summary, if your income is solely related to rent, then you can report it on Schedule E.  Reporting your income on Schedule C also triggers a 15.3% self-employment tax on your Form 1040.

[Anonymous]

This is really helpful. One question, though: if I live in my home 100% of the time (we don’t rent the space unless we’re here), am I understanding this correctly that I don’t have to report the income? We don’t provide services to renters either.