Short Term Rental Loophole without Airbnb Permit

[Brett Hundley]

The short term rental loophole is for rentals where the average stay period is 7 days or less. However in my city a permit is required to list on Airbnb for 30 consecutive days or less. If I want to use the short term rental loophole, do I qualify if I host a 30 day stay on Airbnb. Then, I quickly list and purchase 4 one day stays. This way my average becomes less than 7 days per stay.

At the end of the year I assume to use the short term rental loophole I need to provide Airbnb proof that I averaged 7 days or less.

[Michael Plaks]

Quote from @Brett Hundley:

The short term rental loophole is for rentals where the average stay period is 7 days or less. However in my city a permit is required to list on Airbnb for 30 consecutive days or less. If I want to use the short term rental loophole, do I qualify if I host a 30 day stay on Airbnb. Then, I quickly list and purchase 4 one day stays. This way my average becomes less than 7 days per stay.

At the end of the year I assume to use the short term rental loophole I need to provide Airbnb proof that I averaged 7 days or less.

The word "loophole" assumes following the rules. Renting without a permit when a permit is required is breaking the city rules. Fake "bookings" where you pay yourself are also breaking the rules, now the IRS rules. In fact, it can be called fraud. I'm not in favor.

That said, if your average rental use for the entire year is 7 days or less - you will meet the short-term part of the requirement. You can have a couple of 30-day stays provided that your annual average is kept at 7 or less.

What you cannot do is put someone in for a month and pretend that it was four consecutive 7-day stays. No, it was a single 30-day stay.

Proof is not required when you file your taxes. It is required if the IRS audits you later on. If some of your stays are booked outside AirBnB, it's ok, as long as you can prove that they did happen.