Airbnb Tax Secrets: How to Optimize Your Short Term Rental Taxes with Clint Coons
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- Опубликовано: 16 июн 2024
- In this video I interview Clint Coons of Anderson Business Advisors about all things taxes in regard to short term rentals. A key takeaway is to go in with the mindset that everything is deductible.
Learn more about Clint's services: aba.link/struss1
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Half listening to RUclips and this came on....I had to stop cleaning and get a pen and paper for notes.
ikr!
395 likes?! This needs way more than that! Thanks for the content!
this is so helpful. thank you!!
This was a great find. Thank you
This so informative. Your
Channel is awesome. THANK YOU 😊
This is gold thank you guys
Action Packed Video! Thank you #STRU #clintcoons #finance #taxknowledge #shorttermrental #abb #enjoylife
I loved this video!
This video is too underrated! Great information.
It really like him because he is aggressive at taxes and a lot of CPAs are too lazy. Love the mindset. And the examples.
Great video! Thank you for sharing.
Curious about renting out Airbnb properties owned abroad but taking the income as a US citizen. What is the best way to be structured tax-wise? Thanks
I thought that Airbnb income was only listed on schedule see if you provided substantial services. Such as picking guess up, doing laundry, feeding them meals such as a brother bed-and-breakfast. But if you didn’t provide substantial services, this was not earned income and did not have to be listed on schedule C but scheduled E
It is. This guy's wrong.
It would be nice if Richard can confirm this with Clint Coons as what you are saying is what many of us thought.
@@RealEstateTaxStrategist thank you for answering this question. 👍
Reg. § 1.469-1T(e)(3)(ii)(A)
3rd page
(ii) Exceptions. For purposes of this
paragraph (e)(3), an activity involving
the use of tangible property is not a
rental activity for a taxable year if for
such taxable year-
(A) The average period of customer
use for such property is seven days or
less;
Yes... This is what I keep reading. If you don't provide hotel type services then you're schedule E. The tricky part I can't reconcile is that I rent anywhere between 1 night and 3 months depending on season. Then what??
I closed on a house this year. Is there information as to what closing costs can be used as a deduction? And is interest from mortgage payment deductable?
for the education expenses: if I haven't yet started investing/business, but I start spending money on education/training/subscriptions, can I deduct those expenses BEFORE I've set up a business entity, just on my personal 1040? (I do still itemize above the standard deduction). Thank you
What is with all the thumbs up? You can report your STR income schedule E if you don't provide additional services like cooking or cleaning.
I thought the same for this reason but if your average rental period is 7 days or less then the IRS doesn't consider your STR a rental. It's classified as a business activity and therefore you end up on Schedule C. Google...
Reg. § 1.469-1T(e)(3)(ii)(A)
3rd page
@@jmejiabeher Even when using that exception to classify STR income as non-passive, it still doesn't go on Schedule C, it still goes on Schedule E. The difference is that the tax loss isn't limited by the passive activity rules on form 8582. Most professional tax software (and some consumer tax software) have an option to specify that rental income is non-passive, and that will cause the Schedule E tax loss for that activity to bypass form 8582. That's how you do it, not by putting it on Schedule C.
Also, in addition to having an average stay of 7 days or less, you also have to put in enough hours to materially participate.
Question... Documenting your travel expenses obviously is important for tax purposes... you mention setting up meetings on specific days to include those business expenses for your stay... What if your meetings are done via zoom? If that doesn't count than I get it... you would need to document that at least someone else was there that wasn't part of that zoom ect.? Thanks for your help!
This is key information. I talked with my CPA yesterday and brought up the Airbnb that I run out of my personal home. I didn't think I could write off anything. WRONG! We went down a laundry list of items, and I'm currently listing my furnishings, insurance, milage, cell phone, utilities, etc.
"I pay as little tax as possible, because our government takes it and throws it down the drain." ~Donald Trump
You think you are Donald Trump? Signing his name or?
Who is your CPA? I need a good one.
@@kaemcyd2932 You not familiar with how quoting someone works, or?
Are the employment taxes fazed out
What about Fuel Costs for generators to run for the AirBNB/Hipcamp Amenities and Power for guest?
Business expense!
scheduling a call
IF you were doing airbnb to pay the rent of the house. Are you able to write off the rent?
Help. Schedule C was recommended for Airbnb str in this video. Isn't Schedule E appropriate for those of us that do not provide meals and services? Here is Airbnb article. Am I self-employed as a rental host?
If the room or home you list is used only for renting, and if you provide over-the-top services for your guests (like meals and cleaning services), you would be considered self-employed by the IRS. In other words, if your Airbnb or VRBO rental looks more like a traditional bed & breakfast, you would need to start paying self-employment tax in addition to your rental tax. Self-employment tax is a 15.3% tax that covers Medicare and Social Security.
I did my last two years through turbo tax business, since I run my Airbnb through a sole proprietorship, TurboTax has my husband and I file seperated schedule c, and split all costs and income. I think it has more to do with how your business license is setup. I don't provide over the top services, just a house and usual fixings.
That's correct. Airbnb income generally shouldn't go on Schedule C, that's a common mistake. The only exception is as you mentioned, if you're providing unusual services to guests like meals or daily cleanings. (Well, there is one other exception, which is if you are flipping a property and you have some incidental rental income related to a flip.)
normally cost seg costs ~$4K minimum so not always easy to justify for a single family house; anyone knows of ways to reduce cost?
In the video he states that the average price is $2K so if you've been quoted $4K I'd shop around.
Would you mind doing a RUclips video on tax segregation? For instance a flipper picks up a beat up piece of property for hundred thousand dollars. Then the flipper puts in $40,000 to get it up to and after repair value. Now you got a house were $200,000 say. But if you want to use this house as a full-time rental, can you do a text segregation on the $40,000 and then write it off over five years or seven years? Gosh I think that means you could take rental income out of this property had no no taxes at all for several years? Am I correct? How do you do this? What forms you need? What would it cost to hire you or another text visor to do a tax aggregation questionSegregation? Oh! Sorry for the super long question!
I just need to know if my rented units “Rental costs”?can be deducted. I don’t live there
Yup, business expense.
NO ONE TALKS ABOUT THIS - how do taxes work for an Air B&B, after your monthly expenses what percentage do you set aside for the end of the year business taxes? Do you also pay the quarterly sales taxes? Please help!!!
That tends to not be an issue very often because it's common for the depreciation to cancel out your rental income, so the Airbnb may not actually result in having to pay more in taxes (at least not until you sell it). If you have a particularly profitable Airbnb, then you may end up with taxable income, so in that case you may need to start making quarterly estimated tax payments.
If I rent out my Florida property for 90 days to one renter, then the balance of the year is to 7-days or less renters, so that the average length of stay is say, 6.8 days, does that meet the overall 7 day STR rules set by the IRS ?
It's calculated as the total number of days rented, divided by the number of stays. With our clients, I've often seen cases where one long term renter can cause it to have a longer than 7 days average stay, depending on how the math works out.
They mention depreciation cost a lot but how how to they qualify profit if my monthly mortgage is 1500 and I make 1600 on airbnb is my profit 100 or 1600 or something in-between
There is a difference between Net income to you eg how much cash you get and Net income for tax purposes. To make it simple: Depreciation is considered a 'non-cash' expense meaning you can deduct it as a business expense for tax purposes but it doesn't actually cost you anything. On a cash basis, $1600 revenue from your Airbnb minus expenses (including your mortgage) =net income. For tax purposes, it's $1600 revenue minus expenses including depreciation = net income. I'm an accountant, I hope that helps.
If you are renting rooms in your home, or even your entire home, if it your primary residence, I have been advised NOT to run the income through an LLC that is taxed as an S corp because you could lose your primary residence, if your business goes bankrupt or you are sued by a guest. If you Schedule C it as rental income, you do not run that risk. Is this correct?
That's what asset protection is for, so you don't lose your home via lawsuit. Or maybe you meant 'lose the ability to enable you to claim the place as your primary residence"?
Can I have the address foot LLC?
This isn't exactly correct. According to IRS publication 527, STRs still qualify for passive income unless substantial services are offered (example room service). I have vetted this through 2 CPAs. Maybe there is something I'm missing?
It comes down to material participation. You need to provide 100 or more hours of work each year which also must be greater than the amount of work provided by any other entity or individual (ie management company) OR provide 500 or more hours of work. Those two things qualify as material participation. Otherwise, it is passive. Rental real estate is automatically characterized as passive unless you are a real estate professional, however if you rent out 7 days or less, so short-term rentals, you are not automatically classified as passive. This is why it is easier to have active income from short-term rentals than typical rental activities. I am a CPA. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Substantial services includes towels, linens, coffee maker, etc. Pretty much anything that you normally wouldn't provide to a long term renter.
@@ericjones3146 wrong
www.hrblock.com/tax-center/wp-content/uploads/2018/05/airbnb-taxes.pdf
@@nathan4356 l
This is only for US?
He's discussing USA taxes, yes.
make a video about coronavirus and airbnb bro :D
Thanks, Petar! - Join my webinar on coronavirus, stock market sell off, and implications for STR entrepreneurs and investors on Saturday, February 29th, 10:30 AM Eastern - geni.us/XaYR2.
I'm getting a lot of cancellations because of this.
🤯🤯🤯
Idk about this. Illegal
I'm an accountant, the tax strategies Clint discusses are absolutely NOT illegal.
I want to talk to clint
Hurts my head.
Most of the airbnb host has absolutely no experience in hospitality. Airbnb is the worst when it comes to cancellations. As a guest there is no help or support. Whatever issue you have will keep getting forwarded or passed on to another airbnb "ambassador"/representative who will have no records or history of the issue you 1st reported. & when you finally do speak to someone it'll take days or even weeks before you can be refunded your money back. I wish to god there was another alternative or company besides airbnb but for now i would highly recommend anyone to just book a room at a hotel/motel.
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