Short Term Rental Tax Rules: What Every Host Needs

Under section 280A(g) , if you use a home as a residence during the year and actually rent it for less than 15 days, the rent is left out of your gross income and no deduction tied to the rental is allowed. Fourteen days works. Fifteen does not.

Hypothetical: you own a cabin near a ski town, use it yourself, and rent it for 12 nights during a festival at $800 a night. That is $9,600 of rent you do not report. You also cannot deduct the cleaning or platform fees. Mortgage interest and property taxes stay on Schedule A as normally allowed, per Publication 527 .

Add three more nights and the result flips. At 15 nights, $12,000 of rent is reportable and you move into the expense rules in the next section. There is no partial credit for the first 14 days.

The rule has a precondition: the place must count as your residence for the year. A property you never use is not covered just because it rented for only a few days. Business owners renting their own home to their company are a separate topic, covered in our Augusta Rule guide.

Section 280A(d) treats a unit as used as a home when your personal use is more than the greater of 14 days or 10% of the days it is rented at a fair price. The 10% only helps once you pass 140 rented days. At 200 rented days, the limit is 20 personal days.

What counts as personal use. Publication 527 counts any day, or part of a day, that the place is used by:

• You or any other owner.
• A family member of an owner, meaning spouse, siblings, ancestors, or lineal descendants, even if they pay, unless they pay fair rent and use it as their main home.
• Anyone under a swap arrangement that lets you use another home.
• Anyone paying less than a fair rental price, which includes the friend-and-family discount.

What does not. A day you spend working substantially full time on repairs or maintenance, not improvements, is not a personal day, even if your family enjoys the place that day. Keep dated notes and receipts.

Two separate consequences. First, any personal use means you divide shared expenses by days of use. Days available but not rented do not count as rental days. Second, crossing the 14-day or 10% line makes it a home for the year. Then, if you have a net loss, Publication 527 limits your deductions in order: fully deductible items and direct rental costs first, then operating costs, then depreciation, each only up to the remaining rent. The excess carries forward to the same property. Renting a home under this rule is also not treated as a passive activity.

If you are trying to preserve a loss on a vacation home, the fine print matters. Our spoke on vacation home personal use covers how this interacts with the loophole.

Most basic rentals go on Schedule E , and rental income from real estate generally avoids self-employment tax. Publication 527 moves you to Schedule C if you provide substantial services primarily for your tenant's convenience, and gives regular cleaning, changing linen, and maid service as examples. The IRS adds that you may have to pay self-employment tax on the income.

The regulation, Reg. 1.1402(a)-4(c)(2) , excludes payments for space where services are provided to the occupant, naming hotels, boarding houses, and tourist homes among its examples. Services count when they are primarily for the occupant's convenience and go beyond what is customary for renting space alone. Heat, light, cleaning common areas, and trash collection are not occupant services.

The gray area is everyday hosting. Turnover cleaning between guests resembles preparing a space to rent. Daily housekeeping, fresh linen during a stay, meals, or concierge help look like hotel services. No IRS bright line sorts every case, so the facts of your listing control. Our Schedule E vs Schedule C guide walks through it in more depth.

What it can cost, hypothetically. Say you have $40,000 of net profit on Schedule C and no other earned income. Per Topic 554 , the tax applies to 92.35% of net earnings, or $36,940. At 15.3% , that is about $5,652, and you deduct half of it when figuring adjusted gross income.

A high earner sees a smaller number. The 12.4% Social Security part applies only up to the combined wage base, which is $184,500 for 2026. If your W-2 wages already exceed that, only the 2.9% Medicare part remains, about $1,071 here. The additional 0.9% Medicare tax can also apply above $250,000 of wages and self-employment income on a joint return or $200,000 for a single filer.

The passive loss rules generally treat rentals as passive. Reg. 1.469-1T(e)(3)(ii) says an activity is not a rental activity if the average period of customer use is seven days or less, or 30 days or less with significant personal services provided by or for the owner.

The average is a simple division under Reg. 1.469-1(e)(3)(iii) : total days in all customer stays, divided by the number of stays. Vacant days are not in it. Stays of 3, 4, and 11 nights average 6 nights.

Clearing that test does not make a loss deductible by itself. Next comes material participation, which has seven tests . The ones hosts most often discuss are more than 500 hours, doing substantially all of the work, or more than 100 hours and at least as much as anyone else. Cleaners and property managers count toward "anyone else."

The planning belongs on other pages, and we keep it there on purpose: the STR loophole guide for the full strategy, what to do when your average stay runs over seven days, and our short-term rental loss limitations article.

For platforms and other third party settlement organizations, a Form 1099-K is required only if gross payments exceed $20,000 and transactions exceed 200 in the calendar year. Both must be true. The One Big Beautiful Bill restored this threshold retroactively , replacing the lower levels older articles still quote.

Plenty of hosts will not receive one. A host with 42 stays and $48,000 of rent would likely be under the transaction test. That changes nothing about the tax. The IRS says that whether or not you receive the form, you must report the income .

When you do get one, expect it not to match your deposits. Box 1a is not reduced for fees, credits, refunds, or discounts. Your records bridge the gap between that figure and what you report. Our guide to reconciling Airbnb and Vrbo income shows the bookkeeping side. Also check how your platform's annual statement treats any occupancy tax it collected.

If the form is wrong, ask the issuer for a corrected one. The filer's name is in the top left corner. The IRS says directly that it cannot correct a Form 1099-K.

Occupancy tax goes by many names: lodging, transient, hotel, tourist development, bed tax. It is charged on the stay, usually to the guest, and it runs apart from your income tax. Being exempt under the 14-day rule for income tax does not tell you anything about it.

Platforms collect it in many places. Airbnb says that in the areas it lists it calculates the tax, collects it from guests at booking, and remits it. It also says hosts in those areas remain responsible for assessing all other tax obligations, including state and city ones. Coverage can be partial, with one level of tax collected and another not.

Four states show how far the rules can differ:

These are examples, not a complete list, and they can change. Rates vary as well. In one Florida county, a 2022 state notice set the combined rate at 12.5%, made up of the 6% state tax, a 5% tourist development tax, and surtaxes. Look up your own location instead of relying on a national average.

Your occupancy tax check, in five steps:

1. 1Open the Taxes section of each listing and note exactly which taxes the platform collects there.
2. 2Look up your state revenue department page on short-term or transient lodging, and whether you need a license or return even when a platform collects.
3. 3Check your county and city separately. Local lodging taxes and rental permits often sit with a different office.
4. 4List your direct bookings and any platform that does not collect. A platform cannot collect on a stay it did not handle.
5. 5Keep a yearly schedule by tax and jurisdiction: stays, taxable amount, tax collected, who remitted it, and the confirmation.

Why it deserves an hour. Suppose, hypothetically, your city charges 3% and your platform does not collect it. On $48,000 of rent, that is $1,440 a year you were supposed to charge and remit. If you find this years later, you can no longer charge those guests. Ask your local tax office how it handles past periods.

Scenario A. Twenty personal days is more than the 17-day limit, so the cabin is a home for the year. The $6,642 loss cannot offset other income this year. Under the Publication 527 order, depreciation is what gets trimmed, and the $6,642 carries forward to this property.

Scenario B. Four fewer personal days and the cabin is not a home, so the used-as-a-home limit does not apply. Whether the $7,585 loss is usable now depends on the passive rules. The average stay is about 4 nights (170 divided by 42), so this is not a rental activity under the 7-day test, and the next question is material participation. If the owner materially participates, the loss can generally be nonpassive. If not, it is generally suspended.

The other rules apply to the same cabin at the same time:

• 14-day rule: out of reach at 170 rented days, so all $48,000 is reported.
• Schedule E or C: turnover cleaning alone, with no daily housekeeping, points toward Schedule E, subject to the facts. With a loss, self-employment tax would not be the issue this year anyway.
• Form 1099-K: at 42 stays, likely none, and the $48,000 is reported anyway.
• Occupancy tax: if the platform collects state tax but not a hypothetical 3% city tax, the owner has $1,440 to deal with.

Notice what decided the outcome: a family long weekend. Count personal days before the last one of the year, not when you file. For the deductions themselves, including how to handle furnishings, go to our Airbnb tax deductions guide. If you do your books yourself, our short-term rental bookkeeping page shows what we track.