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Yes, as an Airbnb owner, you can potentially claim Section 179 deductions, but it depends on the specifics of your situation. Section 179 allows business owners to deduct the full purchase price of qualifying equipment and/or software purchased during the tax year.
In the context of an Airbnb, if you're buying furniture, appliances, or other equipment for your rental property, these could potentially qualify for a Section 179 deduction. However, there are some limitations and rules to be aware of.
Firstly, the property must be used more than 50% of the time for your business. So, if you're using the property personally for more than half the time, you wouldn't be eligible for the deduction.
Secondly, there's a limit on how much you can deduct. For tax year 2023, the maximum amount you can deduct under Section 179 is $1,000,000, and this limit starts to phase out if you place more than $2,500,000 of Section 179 property into service.
Lastly, the deduction cannot exceed the aggregate amount of taxable income from your active business. If your Airbnb isn't generating a profit, this could limit your ability to take the deduction.
Remember, tax situations can be complex, and these are general guidelines. Your specific situation might be different, so it's always a good idea to keep detailed records and consider seeking advice from a tax professional.
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