Dear Tax Guy, I just started renting my house out on Airbnb. I started a limited liability company to keep the expenses separate from personal ones. I am trying to figure out what would be considered tax deductions in this scenario?
The Internal Revenue Service says rental owners may deduct mortgage interest, property tax, operating expenses, depreciation, and repairs. The cost of “improvements” are not deductible — though some or all of the improvements may be recovered through depreciation. June Toth, managing member of zbt Certified Public Accounting & Consulting in Edison, N.J., is based close to mountains and beaches and, thus, regularly receives client questions on rental income. Your tax deductions could fall depending on your own living arrangements.
Putting it a different way: If you rent your property out for 14 days and under, you do not have to report the rental income, Toth said. But that means you can’t deduct expenses connected with the rental either, she added.
You can deduct all the damages the renters do to your property