Скачать или смотреть Short-Term Rentals: A Passive Loss Limitation Workaround

Short-Term Rentals: A Passive Loss Limitation Workaround

Under the regulations, property that is rented for less than seven days on average is not considered a per se rental passive activity. Because of this you do not need to meet the difficult "real estate professional" rules to avoid passive treatment of short-term rental real estate. Instead, you need only meet the material participation rules.

As a result, it is easier to avoid passive treatment of short-term rental real estate. This means that, as long as you "materially participate" in the short-term rental activity, any paper losses incurred in such rental activity may be used to offset active income from, for example, your wage job.

But there may be tax drawbacks that are often overlooked if, rather than a paper loss, your short-term rental activity shows a profit. We will discuss that aspect tomorrow.

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