JAD wrote:MvT, really? I know they are two different code sections. Sheesh.
I apologize if that was rude. I didn't intend it that way. If that was the way it was received, I apologize. I've always valued your input. I've decided to support a local business today by purchasing and consuming Sweetwater 420 pale ale. Perhaps today wasn't the best day to support local businesses.
What I was getting at...is that under 469, rental real estate with an average period of customer use of 7 days or less isn't considered rental real estate for 469 purposes. I.E. The RE pro rules don't apply and the up to $25k PAL allowance does not apply. Most Airbnbs fit this fact pattern. Therefore, most Airbnbs will be nonpassive if the owner materially participates (no need to qualify as RE pro). So we just look to those tests under the temp reg.
And then, under 1402 and related case law, we test if the lessor provides substantial services, such as room service, cleaning room during the stay (and not between lessees), shuttle services, laundry, breakfast, etc. Most Airbnbs will fail this test.
Therefore, nonpassive, not subject to SE tax is the common fact pattern with Airbnbs. Schedule E, coded as nonpassive in tax software...
That's what I was getting at...