Whether your vacation home is reported on Schedule C or Schedule E depends on how you use it — especially how often you rent it out versus use it personally.
✅ Use Schedule E if:
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You rent it out as a rental property (even part-time), and
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You don’t provide substantial services (like daily cleaning, meals, or concierge services),
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And/or you personally use it for less than 14 days per year, or less than 10% of the total days it’s rented.
Schedule E is for passive rental income. Most vacation rentals with limited services fall here.
✅ Use Schedule C if:
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You run your vacation rental like a business, and
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You provide substantial services (e.g., daily maid service, breakfast, guest experiences),
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Or it qualifies as a short-term rental business (average guest stay is 7 days or fewer) with active involvement and services.
Schedule C treats it as self-employment income, so:
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You’ll pay self-employment tax,
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But you may also qualify for the Qualified Business Income (QBI) deduction.
❗ If you personally use it a lot:
If your personal use exceeds the IRS limits (more than 14 days or more than 10% of total rental days), then:
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You can’t deduct all the expenses related to the rental.
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You’ll have to allocate expenses between personal and rental use.
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Still, you’d report the rental portion on Schedule E, not C.
Summary:
| Use Case | Form to File |
|---|---|
| Rented occasionally, no services | Schedule E |
| Rented like a business, with services | Schedule C |
| Mostly personal use | Schedule E (with limits) |
