30 Jun Is my Airbnb rental income taxable?

Q. I rent my apartment using AirBnb. Do I need to report this rent as income? And if I do, can I take extra deductions because it’s a rental situation?
— Sometimes landlord

A. Here’s the lowdown on rental income.

Income received from the rental of your personal residence generally is subject to federal income tax, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

He said rental expenses can be deducted against the rental income, but must be allocated by the number of days used the home for personal use and the number of days the property is rented.

Hook offered this example: If you rent your primary residence for 36 days during the year, you can deduct 10 percent of the electric bill (36/365 days ) against the rental income.

“Your rental expenses cannot exceed the gross rental income reduced by the rental portion of the mortgage interest, real estate taxes, casualty losses, advertising and realtor commissions,” Hook said. “Expenses such as electric, as well as gas, home insurance, landscaping, etc. which would otherwise not be deductible are deductible for the days the property is rented.”

Finally, Hook said, there is an IRS rule that if you rent your personal residence for less than 15 days during the year that you do not have to report the rental income. But in that case, you can’t deduct the rental expenses.

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This post was first published in June 2016.