![]() Most likely, they do it part time because they have a job where someone pays them a paycheck every week. Well, it’s possible that this is not an activity engaged in for profit. Let’s say we have someone who is an Uber driver, and they do it part time. ![]() And even one preliminary question to ask is, “Do you make any money off of anything connected with the internet?” Because it’s possible they could have a rental like that and receive no 1099 for it. So making sure you’re asking those questions. And they want to know that you have that property there. They probably also have to register for a business license, and some local jurisdictions have additional registration requirements, such as San Francisco and a few others, to actually come in, register, pay a fee. So, certainly, at the federal and state level, how do they treat that particular rental? Is it subject to the passive activity loss rules? Could it be subject to the 280A(c)(5) limitation rules? And you can look at the rules to figure that out.īut at the state and local level, and some states, it could possibly have sales tax - local level, likely transient occupancy tax. If you’ve got a client that’s renting out a home on Airbnb, a few things to think about because this client is going to have some federal, state, and local tax obligations, and if we’re just focused instead on federal and state income tax obligations, we’re going to miss a few things.
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