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Level 1
posted Aug 20, 2024 3:15:45 PM

Depreciation & Interest Reporting for AirBNB Property Owned Personally, but Operatings Run Through LLC

Hello All!

 

I personally own an investment property with the purposes of short term renting through AirBNB. Operations (income, expenses, management, etc) are run through an LLC. However, the property and loan is owned by me personally. I plan to file an 1120S for the LLC operations, but how would I report the interest and depreciation related to the property? Is it even allowed in this situation?

0 1 45350
1 Replies
Level 15
Aug 20, 2024 8:16:05 PM

 Is it even allowed in this situation? No. the S-corp cannot take depreciation and interest expense deduction for property it does not own. Without you personally having some sort of rental income, I don't see a good profit motive. It might work if the LLC/S-corp (i assume that the election has already been made) paid you fair rental for the use of the property.  However, this could be complcstad because of the self-rental rules. As is the interest might be deductible but not on schedule E but schedule A as investment interest which won't be deductible unless 1 you itemize and 2 you have investment income to offset it.  seek professional guidance.