AirBnB income and expenses on my primary residenc

[ciccio]

I rent my primary residence through AirBnB when I am on travel. How do I report income and expenses on my primary residence? as a rental property on Schedule E or as a business on schedule C?

[HelenC12 · Accepted solution]

Whether you use Schedule C or Schedule E to report your Airbnb rental depends on how actively you are involved in running your Airbnb business and what services you offer.  Use:

• Schedule C - If you provide services, like a hotel or B&B would (cooking, cleaning services, maid service etc). 

• Schedule E - If you are just renting out a space and you do not offer any additional services.

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.

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

To enter the rental on Schedule E in TurboTax Home & Business, please follow these steps:

1. In TurboTax, search for rentals and select the Jump to link at the top of the search results.
2. Answer Yes to the question Did you have any rental or royalty income and expenses in 2019 for property you own?
3. Follow the on-screen instructions as you proceed through the rental and royalties section.
   • We'll ask you to enter general information about your rental (like description, address, and ownership percentage).
   • Eventually, you'll come to the Rental Summary screen, which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses.

Tip: Rent is considered income in the year you received it, not the year it applies to. This means that a rent payment for the month of January 2020 collected in December 2019 is reported on your 2019 return.

To report your AirBNB on Schedule C: 

1. Open or continue your return.
2. Search for schedule c and select the Jump to link in the search results.
3. Answer Yes to Did you have any self-employment income or expenses? and follow the instructions.
   1. If you've already entered self-employment work and need to enter more, select Add another line of work.

If you need Schedule C to report a 1099-MISC, search for 1099-misc and select the Jump to link. Answer Yes to Did you get a 1099-MISC? and follow these directions. We'll ask questions to find out if the income needs to go on Schedule C or C-EZ and add the right schedule to your return (if needed).

If your return only requires Schedule C-EZ, we'll generate Schedule C  for calculation purposes. It won't be filed with your return.

Source: IreneS TurboTax FAQ 1 TurboTax FAQ 2