Is Airbnb double taxing co-host payouts?

[Ryan2260]

In the event of a payment being split with a co-host, Airbnb sends both a 1099-K to the primary host for the full amount of the booking, AND additionally sends a 1099-K to the co-host for their cut.

So in a scenario where a payout is split 80/20, Airbnb sends the primary host a 1099-k for 100%, and the co-host for 20%, totalling 120% of the payout.

So in the scenario below (from Airbnb's own FAQ) they are sending out $714.40 worth of payouts in their 1099, but only actually paying out $600.

Is this not double taxation on the $114.40?  Airbnb is reporting to the IRS that both the primary host and the co-host received those funds.  The best the primary host can do is add it as an expense on their taxes, but now their are two people claiming that as an expense against the co-host (Airbnb saying they paid $114.40 to them, and the primary host saying the same) even though they only received it once.  So any way you swing it, the numbers won't add up to the IRS with the way Airbnb is reporting on their 1099K's, right?

[Joan2709]

@Ryan2260 

I'm not an accountant for sure! 😊 I think this is how it works....

I believe the Primary Host reports and pay taxes on the entire payout. They then deduct the Co Host payout as an expense (if it is allowable). That way this is not double taxing as they are deducting the 20% paid to the Co Host and are only paying taxes on the 80%....I think.

The Co Host only reports what they received as income (their cut on the 1099 of 20%).

Primary Host Net Income Tax 80% and Co Host income tax 20% = 100% 

Any accountants out there know if this is correct?

Tax Resources For US Hosts

https://www.airbnb.com/help/article/1213

[Alex]

Hi @Ryan2260!

Hope everything is going well. Did you check Joan's answer? It might help you to understand the situation better. 😊

Let us know if you need help with anything else, 🙂

Alex

[Isaac498]

Unfortunately Joan’s answer is incorrect. I also manage many airbnbs and got a 1099 for income that I did not earn. I cannot deduct a cohost payout because that would require me sending a 1099 to my cohost; but I didn’t pay my cohost, Airbnb did, and Airbnb already sent my cohost a 1099. 
Airbnb is sending a 1099 on income to the cohost, to two separate parties; the cohost and host. Gives Airbnb a double deduction and the host a double taxation.

I emailed them pointing out their error and they sent me a generic response about gross vs net earnings.

They should not be issuing 1099s to two different people for the same income. The fact that they paid your co-host directly and also issued a 1099 to them means that Airbnb acknowledges your co-host as the recipient of that income; not you.

Their response is deflecting by referring to “gross earnings,” but the issue isn’t about gross vs. net; it’s about Airbnb misreporting income to the IRS. If Airbnb paid the co-host directly, you never received that money, so it should not be included in your 1099 at all. You should only be taxed on money that actually entered your account.

My accountant advised I file a form 4852 when filing my taxes disputing airbnbs incorrect 1099 while providing my 2024 transaction history showing the actual money Airbnb paid me, and not what they paid my cohosts.

[Jenna447]

Unfortunately in the two years I have dealt with having a co-host  on Airbnb, neither of my 1099-K forms have made any sort of sense. And Airbnb has refused to fix it either year. So regardless of how the taxes work...Airbnb is terrible and not being forthcoming. Good luck getting an answer from them. I am trying to figure out how to report them to the IRS.

[Jamie1191]

Yeah this makes zero sense. Ive just had the same issue. My wife and I have our own independent properties and she receives a 100% co-host payout on hers, yet my 1099K has all of that income as well as my properties income listed. She then received a 1099K with all of the income from her property... so as far as the IRS is concerned we have both received the income from her property despite it never having touched my bank account.

Our situation is complicated by the properties being foreign and in our respective countries, so claiming a co-host payout as a deduction isnt a solution. 

Very annoying and a ridiculous way of doing things. I have just spoken with Airbnb and basically said if you are going to insist on reporting to the IRS that you paid us both $30k, then I want my $30k.

[Isaac498]

I agree with you. See my reply above. 

Airbnb is trying to shift the burden onto you instead of fixing their mistake. They should not be issuing 1099s to two different people for the same income. The fact that they paid your co-host directly and also issued a 1099 to them means that Airbnb acknowledges your co-host as the recipient of that income.

Their response is deflecting by referring to “gross earnings,” but the issue isn’t about gross vs. net; it’s about misreporting income to the IRS. If Airbnb paid the co-host directly, you never received that money, so it should not be included in your 1099 at all. You should only be taxed on money that actually entered your account. You can file a form 4852 to dispute airbnbs 1099 and include your 2024 earnings statement in your filing as proof that you’re earnings to not match their 1099.

[Serge805]

This just happened to me as well. I just contacted them to see what they say. 

[Isaac498]

Here again with another reply after days of research and speaking with my cpa. Hopefully this helps everyone :

I host 12 properties where the co hosts(property owners) get 80% of the income. Because I’m the “listing owner” Airbnb sent me a 1099 for 100% of the income but also sent a 1099 to the cohost(property owners) for the 80% they were paid. This also goes for cleaners that receive direct payment from Airbnb— they receive a 1099 from Airbnb too but the host gets 1099 for that same income. 

Here is the solution:

-As the primary host, if Airbnb is paying your co-host a portion of your earnings (e.g., a commission or share of the rental income), you typically can deduct that from your gross income when filing your taxes. This is often treated as a business expense, reducing your taxable income.

However, here’s where it gets tricky:
• If Airbnb is already issuing a 1099-K to your co-host for their share, you would not need to issue them a separate 1099 because the 1099-K is already covering the payments they received.

• Issuing a 1099 to your co-host for the same amount you paid them would cause double-reporting, since they would end up with both the 1099-K from Airbnb and your 1099, which could lead to tax issues for both of you.

3. What Should You Do?
• Deduct the Payments: You can deduct the payments  made to your co-host from your gross rental income when filing your taxes. This will reduce your taxable income.

• Double 1099 Issue: Since Airbnb already issued the 1099-K to your co-host, you do not need to issue them a separate 1099. In fact, doing so would cause the co-host to be taxed twice on the same income.

Basically you need a line item as an expense and label it either “property owner payouts” or “co-hosts payouts” or “cleaner payouts” and you can download how much was paid to your cohost or cleaner by Airbnb  based on the 2024 tax year in the earnings tab of your host profile.

Hoping this information helps the others that are struggling with the same issue. This is definitely new for 2024(the listing owner receiving a 1099 for gross earnings) it was not like this prior years.