Taxes for a U.S. citizen living in a foreign country and renting an apartment in a foreign country

[Lindsey1]

I am a U.S. citizen who has been renting an apartment on Airbnb in Japan while living here the past three years. I live in Japan, and work in Japan. Am I required to report and pay taxes on my Japan Airbnb to the U.S.? Can anyone help me sort this out?

Thank you!

[Kelly3]

This is exactly my husband's case - he doesn't own the property, he used to live in a 2 bedroom apartment and host there as one private room, then after he moved out he hosted as 2 bedroom whole house listing.

He is getting the payouts to his American bank account (I am not sure if you can get payouts to the local bank account if you are an American citizen...hmmm) , and since Americans are required to file taxes even if they are working abroad, etc, he did file his tax last year, and I think he paid some tax regarding his Airbnb income. I don't really know how exactly - cause his total rent spent was more than the income from Airbnb, yet he was still living there... so technically he didn't 'earn' anything, more like it was cheaper rent for him.

He got this email from Airbnb few days ago -

Tax season is almost here, so we wanted to update you on your 2015 earnings and tell you about some tax resources you can use. As a reminder, you’re responsible for reporting your 2015 Airbnb earnings.

You’ll find everything you need to report your earnings and file your taxes in your new Airbnb Earnings Summary. Based on new information from the IRS, Form 1099-Ks are provided to hosts who have earned over $20,000 and hosted over 200 reservations in 2015. Since you won’t be receiving a tax form, please use the 2015 Airbnb Earnings Summary to report your Airbnb income.

He got just above $20000 payouts last year, which is different from 'earned over $20000' - he is going to file something anyway and still pay some tax. He thinks it is way safer to do that then have them audit them - he doesn't think IRS would care for someone with his income level, anyway, it is better to eliminate things that might concern him.

I would love to hear more from people who is in the same shoe with us and Lindsey.

[Kelly3]

@Lizzie0 @Lizzie

Could you remove this posting? I posted this while I was logged in as my husband 😛

[Lizzie]

No problem @Kelly3, I've just removed it. 🙂

[You-House0]

Hope we hear from someone in the know soon! I've lived outside the US since 2001 and am now in Bangkok. I got a notice today from Airbnb about taxes but the only option is to use a US address! Help!

[Hiroshi-And-Naomi0]

I'm also in the same situation but living in Canada. I've been trying to figure things out on-line but there really is not a lot of information to help out expats. From what I can gather, you are definitely required to report the income from Airbnb to the IRS. The thing I'm trying to sort out is whether I have to file a Schedule C (self employed) or Schedule E (property rental). From most of the information I've read, if you are only providing a place for someone to sleep in, then it's Schedule E. However, if you're providing "substantial services" then you have to file Sched C. The only thing is "substantial services" is a bit vague. This includes washing the sheets, providing breakfasts, and cleaning. It doesn't say the frequency of these services but if I'm changing the sheets and clean the bathroom after a guest leaves, is that considered "substantial service?"  Some articles say if you're interacting with the guests, that can be considered as being a concierge. I get the impression that the IRS is trying to get filers to go towards the Schedule C which results in a higher tax bracket with the Self employment tax. I also read that people filing Schedule E could raise a flag so if you file Schedule E you need to be prepared to back up your reasons. 

What I would really like to know is if I do file Schedule C, if I am considered exempt from the SE tax because I already am claiming this income and paying tax on it in Canada. US and Canada have a tax treaty that exempts me from getting taxed on my self employment income as a musician. I don't see how this is much different since I'm receiving funds for a rental in Canada. If I was renting a space in the US and living in Canada, I think I'm technically on the hook for the US taxes. 

I found the following link somewhat helpful 

http://learnairbnb.com/airbnb-hosting-tax-categories/?yop_poll_answer%5B2%5D=5&yop_poll_tr_id=&yop-p...

I've asked a few accountants and none of them can give me any advice. They say they either don't have the time to tackle my situation or it's beyond their paygrade. It's quite frustrating and I hope there is someone out there who can shed a little more light. 

[Verónica3]

I have a dual citizenship (US and Guatemalan).  As a US citizen, no matter where I am in the world, I am obliged to declare my taxes. I have done some consulting on the airbnb income and how to file my taxes.  The person who will file my taxes tells me that the income will be filed as self employed job, yet I need to track all of my expenses since it will only have tax over my net income.  I can also file my taxes in Guatemala, but there is no obligation to double tax.  I am still a bit confused on how this will work, yet if anybody of you has more information please let me know.  

[Punta-Punta0]

@Verónica3 I am in the exact same situation and would appreciate it if you could share any information you've learned in the process! Thanks!

[Inanna0]

Per the new terms of service that came out just now (May 2016) when hosts move outside the US, their new outside the US listing is through Airbnb Ireland. I have no idea if that just happens naturally, or if that means a new account or some other hoops. (Nothing in the help section)

I am not an international tax attorney!! 

But I am suspecting that means, once you're renting a property in another country and using Airbnb Ireland that that just might be foreign sourced income, which is taxed differently. But if you are a US citizen, you do still need to file, regardless of where you live, as US citizens have citizenship-based taxation. 

[Steve-and-Cherrie0]

Last year I read on the Airbnb website that a 1099 is not required of US person with rental abroad if you have Airbnb send the payments to Paypal instead of your bank. Is this true?

[Inanna0]

I would think that that would depend upon where your Paypal is located. You still have to report all foreign income, and especially any foreign bank accounts too, although there is a tax deduction if you live outside the US for American citizens on their first 100,00 or so and sometimes even another large deduction for money you spent for housing overseas. It may just be that 1099 is the wrong form. Basically, if that is true, that you don't need a 1099, you probably need another form. Expat tax attorneys can save you a lot of money because they know how to make sure you get the deductions your re due.

[Paddy-Trusella0]

Why does Airbnb not have definitive info about this?

Our situation is that our Airbnb account is in my better halfs name, and she is a USA citizen.

We both serve overseas in Africa and our Airbnb is there.

Does anyone know if we can simply  change the airbnb rego in to my name?

TIA

Paddy