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What is the proper way to file for someone who runs an AirBnB? Would it be a business on a T2125? Or would it be rental income on a T776? Also, how to properly account for home expenses like hydro, internet, etc. I know bedding and furnishing can be expensed 100%, but not sure how to break down the rest of the expenses.
I've had this question before. You have to look at the specific situation. I had a client who was running AirBnB from her house and it was basically a hotel operation: she provided meals, beverages and snacks, did laundry, cleaned the rooms/bathrooms/kitchen, made coffee in the morning, provided advice on local attractions & transportation, even drove some of the guests to subway stations and picked them up from the airport. In my opinion, it was run like a hotel, a very active business, with the owner spending a lot of time running it-certainly NOT a passive rental operation! Once she determined the area of her house used for her AirBnB operations, we allocated utilities accordingly. The Internet was claimed 100% as it was for the guests only. But I believe there may be different allocation methods, too.
Nevertheless, each situation may be different and I'd never assume that every AirBnB operation constitutes a business.
Thank you! That makes sense. I guess the only thing I'm still second guessing myself on is the allocation of expenses. Sometimes guests only stay for a few days.. So claiming expenses on a monthly basis, I think, is not a good idea. I'm wondering what others do in that situation.. Should I prorate the monthly expenses by the number of days a guest stayed over? Is there a way of actually tracking how many guests stayed over and for how many days?
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