Andrew and Rachel occasionally use an online rental platform to advertise and rent their personal residence when they travel out of town. They rented their home for a total of twelve days during the year. How do Andrew and Rachel report this rental income and any allocable expenses on their tax return?

The income is reported on Schedule 1 (Form 1040), line 8, as Other Income. Pro-rated expenses, such as real estate taxes and mortgage interest, may be deductible on their Schedule A.

Income is reported on Schedule E. They should complete the allocation of expenses worksheet for part rental/part personal use property to determine whether expenses are deducted on Schedule E or Schedule A.

The rental income and expenses are reported on Schedule E.

The income is not taxable or reportable. However, to avoid IRS matching errors, they should attach a statement to their return explaining that the income is not taxable.