I am filling out form 571-STR for the first time. It asks me to list everything in the house so I can be taxed on it.
Is this for real? I paid taxes on everything when I initially bought it.
Seems quite strange. Is this correct?
It is my primary residence and I Airbnb two bedrooms in my house.
Yes, I have. You only have to fill it out one time unless you bring in more furniture etc., so bite the bullet and fill it out. I listed items that were gifts or inherited, so I was directed by the tax department to make an educated guess about value. Since most of it was 20 years old or more, I evaluated it by what it may have cost when originally purchased. I do not recall if you can lower that, since it is used and not new. But I do remember telling the person on the phone that I was with my aunt when she bought the bedroom set and knew it was less than $500 which would be impossible to believe in this day and age. His response was to list that and not worry about it. You don't want to list an item's replacement value if you had to buy it today, like you would for insurance purposes, just original cost. That can make things easier. You do not get taxed on it unless it reaches a minimum threshold. If I recall correctly I listed about $4,000 and have not been assessed tax on that amount. I called the tax department, but do not remember if there was a phone number on the form. If not, just look at the taxing authority on the form and google the number. It was a big help for me.
Because we are conducting business in our homes, we have to list unsecured property value just like any other business. It is not a sales tax, because you already paid that. If you are only renting the bedrooms, your value could be low enough to not have to pay the tax at all.
I don't understand this. People are already paying a property tax, and they are paying an income tax on whatever income they make from airbnb. How can your 'stuff' also be taxed for this purpose? Presumably a sales tax was also paid at the time of purchase so this seems really bizarre and of questionable legality. Do hotels have to inventory every item in the hotel and then pay a 'tax' on it?
ETA: Wow. I read the PDF, that is truly insane, being taxed every year for the same appliances, furniture, vases, curtains, rugs.
I was in touch with the San Francisco tax department as well as a tax advisor, and they confirmed you do have to complete 571-STR and list every item that you own for tax. Estimates are okay. Fortunately the tax rate is only ~1% so even $10k of items is only ~$100. I heard some rumors about not having to fill it every year if you fall under some total value threshold, but I'm planning to cross that bridge next year if relevant.