Reply to About to deduct 220k on taxes help me feel ok with it

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Is this your only business? You don't have W2 income because if you do, you cannot deduct those expenses if you don't have rental income to offset it. [/quote]

we have a small amount of income from the running airbnb and about 600k of w2 from our primary jobs[/quote]

It does not sound like running Airbnbs is your primary business, so it should probably be reported on schedule E and subject to passive loss limitations. I would expect an audit if you're taking $220k in schedule C Losses against your W2 income. [/quote]

That's wrong. Airbnbs are active and schedule c because of it being like a hotel you provide services like cleaning and actively manage. Long term rents are passive and schedule e.[/quote]

Actually, you're not quite correct. One can own an Air BnB rental and have it classified as a passive activity. Many folks rent their entire properties, use a property manager, and provide no services. This is a completely passive activity, and it shouldn't be reported on Schedule C.

If you are changing the sheets, cleaning up after your guests, actively managing the reservations, etc... you can report this on Schedule C. This is most common when folks are renting out a portion of their primary residence.

Anybody claiming a $220K rental loss should be very wary. The passive activity loss rules are very IRS-friendly. [/quote]

You are actually wrong. Even if I rent an entire property and hire third parties to do everything it is schedule c income, just like owning and not operating a motel. [/quote]

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