Client sold a short-term Airbnb rental at a gain. Question: Is that subject to NIIT? Some research indicates they need active participation (in addition to being short-term) to avoid being subject to NIIT.
And some research indicates that simply by being short-term it is not passive and not subject to NIIT.
The property was reported on Schedule E in 2021 and sold Jan 2022.
Average 2021 rental period was less than 7 days but the property is out of state and the taxpayer was not involved in management. Cleaning and management was provided by a local realtor.
