Taxes for Airbnb and short-term rental hosts

What is the 14-day rule?

If you rent out a home you also use as a residence for 14 days or fewer in the year, the rental income is not taxable and you cannot deduct rental expenses. Above 14 days, all rental income is reported.

The rule applies per property, and the days count whether the stays were booked through a platform or privately.

Schedule E or Schedule C?

What can hosts deduct?

• Platform service fees and payment processing fees.
• Cleaning, laundry, supplies, toiletries and furnishings.
• Utilities, internet, insurance, repairs and property management fees.
• Mortgage interest and property tax, the rental share.
• Depreciation of the building and furniture. Property used mainly for short stays is generally depreciated over 39 years rather than 27.5.

How does personal use limit deductions?

If you use the property personally for more than 14 days, or more than 10% of the days it is rented, whichever is greater, it counts as a residence. Expenses must then be split between personal and rental days, and rental deductions cannot exceed rental income. Keep a calendar of personal and rental days.

What is the 7-day rule?

If the average guest stay is 7 days or less, the activity is not treated as a rental activity under the passive loss rules. If you also materially participate, for example by managing it yourself for more than 100 hours and more than anyone else, losses, including those from accelerated depreciation, may offset other income. See deducting business losses.

What about occupancy and sales taxes?

Most states and many cities tax short stays. Platforms collect and remit these taxes in many locations, but not all, and some local taxes or registration and licensing requirements remain the host's responsibility. Check your city and county rules. See business licenses and permits.

Some cities also cap the number of nights a home can be rented, require a short-term rental permit, or restrict rentals to a host's main residence. Breaking these rules can bring fines separate from any tax.

What if you rent a room in your own home?

The same rules apply, but expenses are split by both the share of the home rented and the days it was rented. Items used only by guests, such as their linen and toiletries, are fully deductible. Because the property is your home, the personal use rules always apply, and rental deductions cannot exceed rental income.

What happens when you sell the property?

Depreciation claimed while renting reduces the property's basis, and on sale the gain up to that depreciation is taxed at up to 25%, even if part of the gain on a main home would otherwise be excluded. Keep records of improvements and depreciation from the first year of renting.

What does an example look like?

A host rents a condo, bought for $300,000 with $60,000 attributed to land, for 200 nights in 2026 and uses it personally for 10 nights. Personal use is under the greater of 14 days and 10% of rental days, so it is not treated as a residence. Rental income is $36,000. Expenses are $4,500 of platform fees, $6,000 of cleaning, $5,000 of utilities and supplies, and the rental share of insurance, interest and property tax. Depreciation on the $240,000 building over 39 years is about $6,150 a year. Expenses for the 10 personal days are not deductible.

How should hosts organize?

1. Use a separate account

   For payouts and expenses.

2. Keep a day-by-day calendar

   Rental, personal and vacant days.

3. Reconcile platform reports

   Gross bookings, fees and taxes collected. See Form 1099-K.

4. Consider an LLC

   For liability protection. See how to start an LLC.

For long-term rentals, see bookkeeping for rental property owners.

This guide is general information. It is not tax or legal advice for your situation.