Retirement and Hosting

[Maria11669]

If you do the maintenance and cleaning yourself do you have to have a receipt for it to be considered passive income? 

Basically I know my hubby and I can do the work - but then it will be considered self-employment? 

We hope to start and Air B and B in our retirement and hope it does not affect our social security income in a negative way. 

Do I have to have proof that I am having work done or cleaning or can I just do it myself and still report it as passive income? 

We want to do the work ourselves- it this possible? 

[Paul154]

@Maria11669 

Airbnb is new and the tax laws are vague.

Passive income implies you didn't MATERIALLY  participate in the production of your income. What does that mean?

Some people consider stays of more than 3 days as  passive income. Some people consider not providing food as passive. Some people consider hiring cleaners as passive.  IDK.

Pragmatically, if you are speaking about renting a room or a small house the IRS may consider you small potatoes. The tax difference may be too small to argue for the IRS. 

If you have many listings, the IRS will be more concerned with active versus passive. 

To be on the safe side, I choose an active income.  There are so many tax advantages to running a business. These advantages overshadow the passive versus active differentiation so that I don't pay much self-employment tax

Don't let tax concerns stop you from making more income. The activity level can prolong your life and improve your lifestyle. 

Good luck.

[Rebecca181]

I've spoken with the author here (with Nolo) personally - He got his information straight from the IRS. I highly recommend this book, it helped me tremendously. https://store.nolo.com/products/every-airbnb-hosts-tax-guide-arbnb.html