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The growth of the sharing economy has made it possible to effortlessly rent primary and secondary residences using on-line platforms, such as Airbnb (air mattress B&B) and Vrbo (Vacation Rental by Owner). These rentals include home-stays, in which only one room is rented, or short-term rentals of vacation homes, condominiums, cabins, campers, mobile homes, boats, or similar dwelling units.

The basic tax rules for reporting income and deducting related rental expenses are governed by Code Section 280A which requires an allocation of expenses between rental and personal use. With proper tax planning the taxpayer may be able to reduce net rental income to $0 or possibly have a net rental loss to offset other income.

This course discusses tax planning strategies to maximize the tax benefit of home stays and short-term rentals.

Course Key Concepts: Airbnb, Vrbo, Code Sec. 280A, Home stays, Short term rentals, Bolton rule, Pooling Arrangements, Gain on sale of personal residence.

Learning Objectives
  • Explore and understand the basic tax rules of Code Sec. 280A related to short-term rentals.
  • Identify and examine the expense allocation controversy related to interest and real estate tax deductions.
  • Identify key planning strategies for maximizing both personal usage and tax benefits.
  • Explore and understand the tax implications and planning possibilities of various pooling arrangements.
  • Explore and understand the tax implications and planning possibilities on the sale of a personal residence used as a short-term rental property.
Last updated/reviewed: August 25, 2023
31 Reviews (149 ratings)

Reviews

5
Member's Profile
Great lesson on a bunch of random tax strategies - some more well known and others much more detail specific. Very good, in-depth look at rental properties and personal residences in many possible forms. As for the exam, the home exclusion question's answer is incorrect. Technically the rule is 2 out of 5 years before the sale, so even if the property is rented out through 2022, that means that 2018-2019 it was personal use and then 2020-2022 was rented.

5
Member's Profile
A good in depth course for someone with limited tax knowledge to understand the tax impacts of short term rentals. It would be helpful if the instructor would provide an Excel spreadsheet of all the examples. I found it difficult to quickly understand the examples as the the format of each example changes from one slide to another.

1
Anonymous Author
The final exam questions were incredibly unclear on this one. This course specifically goes over 2 methods of allocating deductible expenses, but the exam questions did not specify under which method should the allocations be properly calculated in the given scenarios.

4
Member's Profile
This course was helpful as i have a short term rental property. It helped me understand some of the rules regarding personal time vs rental time and what constitutes each. the irs rules around short term rentals are tricky and this helped to simplify them.

4
Anonymous Author
Lots of good information and several new items to me. It felt a bit rushed at times though as you didn't always have time to digest the implications of all the variables . Good to see we are finally able to review the exam to learn from mistakes.

5
Member's Profile
Timely and thorough, i had to take the exam multiple times as the wording on the exclusion sale of home years is tremendously confusing, or my 40years of CPAing has been wasted. if you used a date converted, that would have been clearer.....

5
Member's Profile
Great coverage of a topic that included items I have never encountered such as the pooling arrangement. Would have preferred that the instructor take it slower when it comes to discussing the Bolton rule and the Pooling arrangement.

5
Member's Profile
I watched this from a personal interest perspective and believe it provided a good base to think about investment properties. The exam was tough since it was my first introduction to this type of material.

5
Anonymous Author
The tricky part of the course was the final exam. I felt like I had a good understanding of the rules before going into the exam, but quickly realize that the exams questions tested your analytical skills.

3
Anonymous Author
Final Exam questions were not very clear. You had to assume that the questions were referring to the IRS method and not the Bolton method which was also discussed as an option.

5
Anonymous Author
Tricky topic but very useful for owners of rental properties and vacation homes like myself. Exam to earn CPE was challenging to pass, but that was expected..

5
Anonymous Author
Goes very in depth and provides good real world examples. Good intro to the concept, as I had no real world experience in this in the past.

4
Member's Profile
Unclear on the quiz feedbacks. Also, the examples are not gone over in details - leaving me to figure out how each number is calculated.

5
Anonymous Author
The examples in this course really helped explain the nuances of short-term rentals. The instructor did a great job of explaining them.

5
Anonymous Author
Great course. Easy to understand with clear examples. Highly recommended. The instructor did a great job explaining the main points.

4
Member's Profile
The instructor spoke a little slow for my taste. I had to speed up the video to help me follow along. Good course, though.

5
Anonymous Author
Short term rental is a complicated area. This course breaks down and explains it thoroughly. Highly recommend this course.

4
Member's Profile
Good overview of tax laws and related strategies. Helpful if considering purchasing a short term rental property.

5
Anonymous Author
A nice run through of the different scenarios you may encounter and how to plan from a tax standpoint.

5
Member's Profile
Simple and effective tax planning strategies outlined with examples and supported by court rulings.

4
Member's Profile
This is a very comprehensive course for tax planning strategies for short-term rental properties.

3
Anonymous Author
This was a good course to review the complexity of short-term rentals and rentals with mixed use.

3
Anonymous Author
Short course, very informative. Overall it hit the mark and provided insight as described.

5
Anonymous Author
It was a great course. Very interesting and a lot of good info for me. Thank you !!!!

3
Member's Profile
I enjoyed this course and would recommend it to anyone who prepares tax returns.

5
Anonymous Author
This is an informative class that it contains many useful knowledges and rules.

5
Anonymous Author
The structure is clear with many great examples and explainations

5
Member's Profile
Very useful for my work. I appreciated the detailed examples.

5
Member's Profile
Another great class! The examples are practical and helpful.

5
Member's Profile
helpful, up to date, and informative with lots of examples.

5
Member's Profile
Excellent but complex. She needed more time and examples.

Prerequisites
Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Tax Planning Strategies for Short-Term Rental Properties6:47
  Sec 280A: Basics Tax Rules for Short Term Rental Properties9:06
  The Expense Allocation Controversy16:18
  The Expense Allocation Controversy-Examples13:32
  Tax Planning Strategies13:35
  Pooling Arrangements9:23
  Sale of Personal Residence Used as short-term Rental5:37
  Conclusion2:41
CONTINUOUS PLAY
  Tax Planning Strategies for Short-term Rental Properties1:16:59
SUPPORTING MATERIAL
  Slides: Tax Planning Strategies for Short-term Rental PropertiesPDF
  Tax Planning Strategies for Short-term Rental Properties Glossary/ IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam