Airbnb Income Tax Reporting and Deductions
Airbnb Active vs. Passive Involvement
One of the classifications the IRS makes when it looks at how you earned your income is "passive" or "active". Active income implies you materially participated in the production of your income. Passive income implies you didn't materially participate in the production of your income. You may be wondering why does this matter? Well, if you are engaged in rental activities determining if your rental income is passive or active will have an implication on what IRS schedules you file, what taxes you are subject to, and how much loss you are able to deduct. Take a look at our diagram to better understand this concept.