Short-term Rental Tax Rules Over 7 Day Average
I have a condo which is in a hot resort area. I rent it out for a minimum stay of 3 days, but the average stays are running 10 days. The unit is rented about 75% of the time during the year. I manage the rentals on-line myself and do all of the invoicing and arrangements. I hire a local on-site manager and cleaning personnel.
Is there a way to treat this as a business and not a rental? The unit is not used as a vacation home and is strictly for short-term rentals.
[ Edited by blincolna on Date 08/21/2009 ]
What advantage in tax treatment do you gain by treating your rental business as an active income activity rather than a passive income activity?
I do not want to be limited to the passive loss limitation. If your income is above $100,000, you cannot claim a passive loss against other income except for passive income.
Talk with your tax advisor to see if you can qualify for "real estate professional" status. if you can, then the amount of net passive loss you can deduct is unlimited.
Otherwise, you have a passive income activity and are governed by the passive loss rules.