TurboTax not recognizing STR non-passive treatment — How do i fix it?

Forum|Forum|3 months ago
April 14, 2026
1 reply
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I have a short-term Airbnb rental (average stay under 7 days) and I materially participate. Under Treasury Reg 1.469-1T(e)(3)(ii)(A) and IRC Section 469, i think this should be treated as a non-passive activity, meaning my rental losses should offset my W-2 income.

TurboTax (both Online and Desktop) keeps treating it as a passive rental and running it through Form 8582, which limits my losses to $0 because my income exceeds $150k. I did have passive losses the prior year from a long term rental.

I've checked Box D (Material Participation) on the Schedule E worksheet in Desktop. Form 8582 is still there and still showing $0 allowed losses.

Has anyone successfully gotten TurboTax to properly treat their STR as non-passive? I prefer the online version because when i sync'd my online version to the desktop version, my rental's net come in oddly 10,000 dollars higher on the desktop version.

AnnetteB6

Level 15

Double check the days of rental use and days of personal use that you have entered for the property. This entry is a common reason that the rental is automatically treated as passive income.

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thesenatorAuthor

Level 2

i found this video saying I need to use the desktop version to mark G and D on the Schedule E worksheet which seems to have worked: https://www.youtube.com/watch?v=lcgyK2TSBYQ

A little disappointing i had to buy the desktop version for an additional $115 because the online version doesn't let you, and paid an additional $70 for live support, and they couldn't tell me the change the video had me do in just a few minutes.