Taxes, 1099s, and multiple properties

[Mark524]

We received a 1099 from Airbnb and have three properties of our own and one we caretake (including collecting payment) for our neighbor. Airbnb lumps all the payments into one 1099, but they are four individual Schedule Cs. How do other hosts deal with this?

[Jen151]

I am wondering the same. I have provided our accountant with the earnings summary that breaks the nights and earnings up among the properties.

Did you receive a 1099 in the mail or your inbox?

Thanks

[Paul154]

You can total up each listing for the year.

Go to transaction history, change the date range jan 1 2017 - Dec 31 2017 for each seperate listing

[Alicia242]

Is text preparation the same for us who just rent a room and private bath in our home and don’t have separate rentals I’d say it’s different I heard I was to use the schedule E is if I own a rental property but I don’t I’m confused on this I get free tax preparation so I need to advise the tax preparer and figured I’d check here on the airbnb community

[Paul154]

@Alicia242

Not an accountant, Not a lawyer.

It depends.

Did you get a 1099 from Airbnb?  If you're under the radar, well I'm not telling.

H&R has a good logic tree to determine if you are a self-employed bread and breakfast operator (Schedule C) or just a passive investor (Schedule E).

For either, you need to determine how much of your house is for investment (20%? 40%)

But you do get a lot of write offs, property taxes, utilites, interest, depreciation, housekeeping labor...

[Alicia242]

@Paul154I did not get a 1099. I just rent a room and prv bath in my home. I dont have a seperate house or apt that I rent out to airbnb guests.  I am already self employed with a small unrelated business. For ex: last year I rented out about 30 nights on airbnb. Ive been a host 1.5 yrs a super host the past 6 months after my review period haha. I just turned on IB 2 days ago going to see what that does. And I set my own pricing no smart pricing for me. I dont think that works to well from what Ive seen in the communty talks ... Ok Ill figure out the % of the house I use for airbnb my guess is 50%) and it must be just a portion of utilities not all of them? I updated a half bath into a 3/4 for my guests so theyd have there own bathroom/shower etc. However, I dont think I can write that off until if and when I ever sell. 

[Paul154]

Not an accountant, but...

I would  expense 50% of the utilities, cuz that is necessary for the guests who stay year round. (I'm usually booked).  

You can depreciate 100% of the bath IF you did it for the guests and they are the only ones who use it.

All very confusing for me also. 

If you only rent out 30 nights and did not get a 1099,  you may be close enough to the 15 day rule which allows you not to declare...

[Mark524]

I got a 1099 in the mail. The Airbnb criteria is 200 transactions AND $20,000 in income for the year.

So I've been looking up Schedule E vs Schedule C. It looks like Schedule C means that you provide "significant services" for the guest. Cooking for them, maid service, etc. We have houses with some basics in the kitchen, and only clean between guests. Would this mean we are a Schedule E? It would make it SOOO much easier as you can just combine everything.

My tax preparer is insisting it's a B&B (a way overused term in our area) and is multiple individual small businesses needing a Schedule C each.

[Paul154]

@Mark524

As a famous American president once said "It depends on what the meaning of the word 'is' is!"

"Significant services" can go either way.  

For me, I am considering Schedule C .  It hurts.

[Mark524]

Was just talking to another business owner in our community about this. Basically he showed me some docs that say if you do most of the work around the house and such, it's Schedule C because you are materially participating. If you hire a management company and people to do all the work for you, it's a Schedule E it's passive. 

Kinda annoying since people who can afford to sub-let their work out to everyone, have little connection to their home, and likely don't live in the area around the home are the ones that benefit from the simplier return!

[James1485]

Sorry, I meant Schedule E. 

[Christine615]

I use Schedule E only because my duplex used to be long term rental before. But the operative word is still "it depends."

You owe social security and medicare taxes on any profits you make if you file schedule C. On the other hand if the property runs at a paper loss then you can write off all those losses to reduce your other earnings from jobs.

So yes - complicated. But the H&R Bloch template was helpful

www.hrblock.com/tax-center/wp-content/uploads/2018/05/airbnb-taxes.pdf

[Christine615]

Here's another good article that explains substantial services and how the IRS views Short term rentals for tax purposes:

https://www.hrblock.com/tax-center/newsroom/income/real-estate/fourth-of-july-rentals/