# tax implications for an American expat in London letting on Airbnb



## neekolas86 (Oct 10, 2016)

What are the tax implications for an American living in London who rents out a 2nd bedroom in their main residence through Airbnb?

Assume £100/day limited to 90 days in 2017 the property will produce £9,000 income. From what I understand, the UK's "Rent a Room" scheme allows the first £7,500 tax-free, so the following £1,500 will be reported and taxable. What I am unsure of is how the £9,000 is to be reported to the United States IRS.

Thanks, 

-n


----------



## Bevdeforges (Nov 16, 2007)

The way it is supposed to work is that you declare the full amount received, less any expenses directly related to the rental (e.g. payments to AirBNB, your direct expenses of the rental - say, laundry, cost of any food service, etc.). You probably should be preparing a Schedule C, but I suspect you could just declare your proceeds net.

You then would use form 1116 to take a tax credit for whatever income taxes you pay to the UK on the rental income.

Or, quite honestly, you could simply forget about the whole thing for your US tax returns. There is little or no way the IRS could or would find out about this extra income unless they chose to audit you for some other (more glaring) reason and happened onto the information through a comparison of your UK tax records and/or review of your bank statements.
Cheers,
Bev


----------

