Airbnb Tax Secrets: How to Optimize Your Short Term Rental Taxes with Clint Coons 

ikr!

You think you are Donald Trump? Signing his name or?

Who is your CPA? I need a good one.

@@kaemcyd2932 You not familiar with how quoting someone works, or?

It is. This guy's wrong.

It would be nice if Richard can confirm this with Clint Coons as what you are saying is what many of us thought.

@@RealEstateTaxStrategist thank you for answering this question. 👍

Reg. § 1.469-1T(e)(3)(ii)(A) 3rd page (ii) Exceptions. For purposes of this paragraph (e)(3), an activity involving the use of tangible property is not a rental activity for a taxable year if for such taxable year- (A) The average period of customer use for such property is seven days or less;

Yes... This is what I keep reading. If you don't provide hotel type services then you're schedule E. The tricky part I can't reconcile is that I rent anywhere between 1 night and 3 months depending on season. Then what??

I thought the same for this reason but if your average rental period is 7 days or less then the IRS doesn't consider your STR a rental. It's classified as a business activity and therefore you end up on Schedule C. Google... Reg. § 1.469-1T(e)(3)(ii)(A) 3rd page

@@jmejiabeher Even when using that exception to classify STR income as non-passive, it still doesn't go on Schedule C, it still goes on Schedule E. The difference is that the tax loss isn't limited by the passive activity rules on form 8582. Most professional tax software (and some consumer tax software) have an option to specify that rental income is non-passive, and that will cause the Schedule E tax loss for that activity to bypass form 8582. That's how you do it, not by putting it on Schedule C. Also, in addition to having an average stay of 7 days or less, you also have to put in enough hours to materially participate.

Business expense!

That tends to not be an issue very often because it's common for the depreciation to cancel out your rental income, so the Airbnb may not actually result in having to pay more in taxes (at least not until you sell it). If you have a particularly profitable Airbnb, then you may end up with taxable income, so in that case you may need to start making quarterly estimated tax payments.

In the video he states that the average price is $2K so if you've been quoted $4K I'd shop around.

I did my last two years through turbo tax business, since I run my Airbnb through a sole proprietorship, TurboTax has my husband and I file seperated schedule c, and split all costs and income. I think it has more to do with how your business license is setup. I don't provide over the top services, just a house and usual fixings.

That's correct. Airbnb income generally shouldn't go on Schedule C, that's a common mistake. The only exception is as you mentioned, if you're providing unusual services to guests like meals or daily cleanings. (Well, there is one other exception, which is if you are flipping a property and you have some incidental rental income related to a flip.)

It's calculated as the total number of days rented, divided by the number of stays. With our clients, I've often seen cases where one long term renter can cause it to have a longer than 7 days average stay, depending on how the math works out.

Yup, business expense.

There is a difference between Net income to you eg how much cash you get and Net income for tax purposes. To make it simple: Depreciation is considered a 'non-cash' expense meaning you can deduct it as a business expense for tax purposes but it doesn't actually cost you anything. On a cash basis, $1600 revenue from your Airbnb minus expenses (including your mortgage) =net income. For tax purposes, it's $1600 revenue minus expenses including depreciation = net income. I'm an accountant, I hope that helps.

That's what asset protection is for, so you don't lose your home via lawsuit. Or maybe you meant 'lose the ability to enable you to claim the place as your primary residence"?

It comes down to material participation. You need to provide 100 or more hours of work each year which also must be greater than the amount of work provided by any other entity or individual (ie management company) OR provide 500 or more hours of work. Those two things qualify as material participation. Otherwise, it is passive. Rental real estate is automatically characterized as passive unless you are a real estate professional, however if you rent out 7 days or less, so short-term rentals, you are not automatically classified as passive. This is why it is easier to have active income from short-term rentals than typical rental activities. I am a CPA. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Substantial services includes towels, linens, coffee maker, etc. Pretty much anything that you normally wouldn't provide to a long term renter.

@@ericjones3146 wrong

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

@@nathan4356 l

He's discussing USA taxes, yes.

Thanks, Petar! - Join my webinar on coronavirus, stock market sell off, and implications for STR entrepreneurs and investors on Saturday, February 29th, 10:30 AM Eastern - geni.us/XaYR2.

I'm getting a lot of cancellations because of this.

I'm an accountant, the tax strategies Clint discusses are absolutely NOT illegal.

My first investment with Mrs Anna gave me profit of over $24,000 us dollars and ever since then she has never failed to deliver and I can even say she's the most sincere broker I have known

expert mrs Anna has been managing my trade for months and I keep making profit every week,made $9,130 last week

Hello. Any one there Please how can I reach this Mrs Anna I've already lost enough of money trading for myself

You can reach her via WhatsApp.👇

Oh sure ±➀➄➀➇➂➀⓪➁➁➁➂🇺🇸