Tax proposal implications

2 Replies

Throwing a quick hit and run post out there because I️ want to keep it open ended. If you’ve read @Brandon Hall post on the House’s tax proposal his first “Biggest Loser” category sights short term rental income as possibly being exposed to self-employment taxes. Am I️ right? What are the details? What am I️ missing? What could this mean to VRs and short term rentals?

Looking forward to what I️ anticipate to be many responses. This could be big.


Hi, @Jeff Piscioniere ,

@Brandon Hall 's post is right on the money - the House's tax proposal could mean the beginning of self-employment tax on rental income, but not all rental income.

First, you'd have to actually report net taxable rental income (after depreciation); net losses (including depreciation) would not result in any self-employment tax.

Second, you'd have to be conducting a "trade or business". This is not specifically defined in the tax code, however. To answer your question, net taxable income from vacation rentals and other short-term rentals that you are active in on a day-to-day basis most likely would be subject to SE tax if this part of the bill passes.

Fingers crossed that this part gets the ax, otherwise it could mean bad things for a lot of RE investors.

Happy to hear what everyone else has to say on the subject.

Nick Aiola, CPA

Smart people will always figure out a way to work within the framework of any law. If there is an employment tax then my expenses will most definintiely grow. Very simple solutions. 

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