Using AirB&B for income & 14 day tax benefit

[Erica]

Curious if any of you utilize AIRB&B as a host. I saw an older thread from 2015 but now it's two years later. More competition.
If so, how many days a year is it occupied? Are you also planning to flip the property?
Renting it for 14 days or less since t= no taxes except FICA & maybe TOT (which is 10% in this county) =18% taxes
Rent it out even one extra day beyond 14 and taxes are paid on every day it's rented
Multiple write offs the first year anyhow so taxes aren't a consideration really
Hookups already avail behind the house for RVer so we'll either rent it out f/t or on AIRB&B.
Just the full timer would lower the house payment to $950 mo. (Probably $1000 but estimating electricity usage higher to be safe)
9 days it would be rented at full price due to events. This is a for sure as the townsfolk said they run out of rooms. Beyond that..it  is unclear to us
Visited the town 6 times so far. Feel very certain we want to live there

We put an offer on this house- http://www.realtor.com/realestateandhomes-detail/521-Brady-Dr_Sierra-City_CA_96125_M13122-47300 should now the outcome by tomorrow.

We may flip the house depending on the housing market in 2 yrs. County Bldg Dept already shows a 3 bedroom (though it has two) so we'll turn the mud-room into a bedroom.

[GettingClose]

If so, how many days a year is it occupied? Are you also planning to flip the property?
Renting it for 14 days or less since t= no taxes except FICA & maybe TOT (which is 10% in this county) =18% taxes
Rent it out even one extra day beyond 14 and taxes are paid on every day it's rented

Not quite sure what you mean by this, or what the questions (if any) are.  Can you add some clarifications?

[undercover]

FICA taxes are only applicable to earned income (doesn't apply to passive rental income). You don't pay TOT taxes, the guest does.

You can't claim any rental expenses (depreciation, utilities, etc.) if you only rent under 14 days, you just don't report that income. After that, you can only claim expenses based on how many days the house was available for rent at a fair rental price.

As far as flipping goes, if you do rent over 14 days and claim depreciation, then you'll have to pay depreciation recapture taxes (flat rate of 25%). If it's your primary residence, then you wouldn't pay any taxes on the amount of the gain that exceeds the amount of depreciation claimed provided you lived in it for at least 2 years.

https://assets.airbnb.com/eyguidance/us.pdf

[Erica]

FICA taxes are only applicable to earned income (doesn't apply to passive rental income). You don't pay TOT taxes, the guest does.

You can't claim any rental expenses (depreciation, utilities, etc.) if you only rent under 14 days, you just don't report that income. After that, you can only claim expenses based on how many days the house was available for rent at a fair rental price.

As far as flipping goes, if you do rent over 14 days and claim depreciation, then you'll have to pay depreciation recapture taxes (flat rate of 25%). If it's your primary residence, then you wouldn't pay any taxes on the amount of the gain that exceeds the amount of depreciation claimed provided you lived in it for at least 2 years.

https://assets.airbnb.com/eyguidance/us.pdf

Thank you for this!

[Erica]

If so, how many days a year is it occupied? Are you also planning to flip the property?
Renting it for 14 days or less since t= no taxes except FICA & maybe TOT (which is 10% in this county) =18% taxes
Rent it out even one extra day beyond 14 and taxes are paid on every day it's rented

Not quite sure what you mean by this, or what the questions (if any) are.  Can you add some clarifications?

Yes I wondered how many days a week others have their homes rented out using AIRB&B.
And what the tax implications are for: 1.  renting it out 14 days vs more. 2. flipping it. 3. Is it lucrative for anyone here?
It's been answered, pretty much. With that info, I have more research to do. Since we won't begin until Jan 2018, it appears
keeping it available as much as we prefer is the way to go. Because our expenses to remodel to add a room on will be much higher
Per the bldg dept, it already shows a 3brm though it's a 2 bdrm house.

[farfromfire]

FICA taxes are only applicable to earned income (doesn't apply to passive rental income). You don't pay TOT taxes, the guest does.

You can't claim any rental expenses (depreciation, utilities, etc.) if you only rent under 14 days, you just don't report that income. After that, you can only claim expenses based on how many days the house was available for rent at a fair rental price.

As far as flipping goes, if you do rent over 14 days and claim depreciation, then you'll have to pay depreciation recapture taxes (flat rate of 25%). If it's your primary residence, then you wouldn't pay any taxes on the amount of the gain that exceeds the amount of depreciation claimed provided you lived in it for at least 2 years.

https://assets.airbnb.com/eyguidance/us.pdf

But if you rent a primary residence's room for more than 14 days and claim depreciation on it, isn't that portion of the house excluded from the gains tax benefit?

[Kay-Ell]

I am an Airbnb host in a touristy destination. I do very well with it. It's booked between 18 and 28 days a month, year round. But that's largely due to where my house is located. The best way that I know to estimate price and booking frequency is to query Airbnb for similar properties in your area and look at their calendars. It won't be 100% but it should give you an idea.