What is a Short-term rental?
A short-term rental is a residential property rented to guests for stays averaging seven days or fewer, or 30 days or fewer when significant personal services are provided. The IRS applies special tax rules to short-term rentals, including potential non-passive activity classification when the owner materially participates. Property owners report income and expenses on Schedule E and can claim deductions for operating costs, Depreciation and amortization, and management expenses. Proper classification affects whether rental losses can offset other income.
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