Renting your main home, vacation home, or other residential property through short-term rental hosting websites like Airbnb, FlipKey, HomeAway, TripAdvisor, or Craigslist is a great way to earn extra income. However, how much money you actually end up pocketing depends on the taxes you must pay on the rental income you earn.
Complex tax rules apply to short-term residential rentals. In some cases, the income you earn from renting your home can be completely tax free. On the other hand, some short-term landlords have to pay not only income tax on their profits, but Social Security and Medicare taxes as well. If you don't take all the deductions to which you're entitled, you'll pay more tax than you need to something the IRS will never complain about! If you incur losses, you'll need to jump through a series of legal hoops to deduct those losses from the other income you earn.
There are many books that explain how to market and efficiently run short-term rentals. But this is the only book that is dedicated to showing you how to maximize your profits by minimizing the taxes you must pay on your rental income.