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Taxpayer had rental home on Sch E in 2022. After tenants moved out at end of 2022, they made it an Airbnb in 2023 and will continue to do so. Can this be left on Schdule E or would it need to be on Schedule C. I've seen both with research and just checking to see if it comes down to average nights stayed per guest and substanial services?
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@taxu2 wrote:
just checking to see if it comes down to average nights stayed per guest and substanial services?
No and yes.
Average nights does not impact Schedule E versus Schedule C, but "services" does.
Average nights could possibly impact passive versus nonpassive (do they "Materially Participate"?).
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If TP is not providing substanial services then I would leave it on Sch.E.
If the propery ls always available for rental use you should not have any adjustment for taxes, interest ect.
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google Short term rental substantial services if they are providing those services, then Sch C is what you use.
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