short term rental - Material participation

Forum|Forum|1 year ago
March 27, 2025
1 reply
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I am a full time Realtor & have a short-term rental for the summer months. I am not local to the property so we use a company to lease it & pay commission & they provide key pickup on the leased weeks & cleaners go in after each guest. I make all decisions on maintenance & rental amounts for the year & handle any maintenance that may need to be done. I am trying to determine if this is enough for material participation?

Thanks for any assistance!

Vanessa A

Level 15

The IRS says the following on material participation.

You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who didn’t own any interest in the activity) for the year.
You participated in the activity for more than 500 hours Pub 925

Basically, if you hired others to manage your property that spent more time on it than you did and you did not spend at least 500 hours on the activity, you would not be considered to have materially participated.

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