What income do you include on your tax return as an Airbnb host? You'll learn the types in this section.
If you are subject to U.S. income taxes, you must include in your gross income all amounts you receive as rent.
‘Rent’ is the gross amount of payment received (before any expenses are deducted) for the use or occupation of the property.
It can also include payments received for any goods or services that are provided, e.g. meals, cleaning, etc.
Taxable rental income is the gross amount of rent received less any allowable expenses.
(Gross rents collected) - (Allowable Expenses) = Taxable (Net) Rental Income
A positive number becomes taxable income, a negative number is a rental loss.
This can also be referred to as ‘net’ rental income. If the allowable expenses are greater than the gross amount of rent received, a rental loss will arise.
Taxable rental income/(loss) must be reported and calculated on Schedule C or E of Form 1040 (see section 9 “How to report rental income and expenses”).
In addition to the amounts you receive as normal rent payments, you may also receive other amounts that should be carefully considered in determining the amount of gross rental income to report.
Examples of such amounts include:
Example: You receive a payout of $5,000 for a Guest’s 10-day stay. The Guest only stays for 8 days and you offer a $1,000 refund via Airbnb. A $1,000 “adjustment” is placed on your account and automatically deducted from your next scheduled payout of $5,000 for another Guest’s stay. Your total payout is $9,000 ($5,000 - $1,000 + $5,000). Your gross rental income is $10,000 and reported as such on your 1099-K or Earnings Summary. On your tax return, you report $10,000 as gross rent and $1,000 as a deduction to arrive at a net rental income of $9,000.
If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental.
You are not required to report the rental income and rental expenses from this activity on Schedule C or E (Form 1040).
The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040).
See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses.
A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property.