Question

I'm switching from a rental (schedule E) to airbnb schedule C. Remodeled in between same year. Start up costs? Or depreciation? Can I put it all on Schedule C?

Forum|Forum|7 years ago
June 4, 2019
2 replies
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Renting out house (schedule E) for last 23 years. Tenants moved out May 2016, left it trashed. Major remodel for 3 months (kitchen, bath, new windows). Then switched it to an AirBnb (this is in AZ where they treat Airbnb as motel) so I also want to switch to Schedule C starting 9/1. Question is can I deduct the remodel under the Schedule C? Can it be assets depreciated or do I put in start up costs? House was not habitable during the 3 months it was being remodeled.

TurboTax Home & Biz Windows

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bodhicitta11Author

I have not lived in this house at all for past 23 years so no personal use. I don't plan to live in it in the near future. Given it is a tourist area and judging by the bookings for first quarter of 2017, I will make a profit in 2017 and triple the income I would have made as regular rental. I am hoping to have at least some tax advantage in being able to deduct either special depreciation (items under 2500) or long term depreciation over next coming years.

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NancyG

Employee

Rental activity for Airbnb may be reported in two different areas of your tax return, for specific reasons, and with different outcomes. Please review this article for a discussion of these options so you may choose the most appropriate place to report this on your return: http://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-your-home-airbnb-vrbo.html

Most taxpayers chose to report Airbnb rental activity on Schedule E. If this applies to you, start under Wages & Income >> Rental Properties (or search for "Schedule E") and follow these instructions: Where do I enter income and expenses from a rental property?

If you provide services to your guests and choose to report your income from Airbnb as self-employment on Schedule C, you may be able to use Schedule C-EZ in the Deluxe and Premier versions of TurboTax Online.

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bodhicitta11Author

Thank you, but I've already determined I'm going to use Schedule C for the airbnb. I'm asking if I can have the start date for the airbnb business during the period I was repairing past regular rental damage as well as remodeling the kitchen and bathroom. This affects whether I can actually deduct everything I did. And I was trying to understand whether that goes in start up costs or if I can just say the business started from the day I began to shift it to airbnb (opened bank account for it, started my business license for it then, hired contractor) I did actually have airbnb income for the last 2 months of 2016