Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified California tax professional before filing.
Los Angeles, California · USA · Short-term rental taxes
Short-Term Rental Taxes in Los Angeles
STR income in Los Angeles is taxed as ordinary income at both federal and California state levels, and hosts must collect and remit a 14% Transient Occupancy Tax to the City of Los Angeles.
The 30-Second Answer
- Federal income tax: Report all STR rental income on Schedule E (or Schedule C if you provide substantial services); deduct eligible expenses and depreciation against that income.
- California state income tax: The Franchise Tax Board (FTB) taxes rental income as ordinary income at rates from 1% to 13.3%; report on California Schedule CA (540).
- Transient Occupancy Tax (TOT): The City of Los Angeles charges a 14% TOT on all stays of 30 days or less — you must register for a TOT Registration Certificate and remit monthly.
- Home-sharing rule: LA limits STRs to your primary residence only; a $3.10 per-night administrative fee applies, and you must register with the city before listing.
Deductions
What LA Hosts Can Deduct
Ordinary and necessary expenses allocable to the rental portion of your property reduce your taxable rental income at both federal and California state level.
If you also use the property personally, expenses must be allocated between personal and rental days using IRS rules (IRS Publication 527). California conforms to federal depreciation rules for residential rental property.
Filing Calendar
Key Dates & Filing Calendar
Missing a TOT remittance or federal filing deadline can trigger penalties — mark these dates now.
TOT must be remitted monthly — there is no annual filing option for the City of LA TOT. Register for your TOT Certificate within 30 days of starting to rent.
City of Los Angeles Office of Finance — finance.lacity.gov/transient-occupancy-tax-requirements
Income Tax Treatment
Schedule E vs. Schedule C: Which Applies to You?
Unlike some countries, the US does not offer a flat-rate simplified regime — instead, the key question is whether your STR activity is passive rental income or active business income.
Schedule E (Passive Rental)
Standard treatment for most Airbnb hosts
- Report gross rental income and deduct all ordinary expenses including depreciation on Schedule E
- Net rental income is NOT subject to self-employment (SE) tax — saving ~15.3% vs. Schedule C
- Passive loss rules apply: losses can generally only offset other passive income unless you qualify as a real estate professional or meet the $25,000 active participation allowance
- California conforms — report the same figures on California Schedule CA (540)
No income ceiling
Schedule C (Business / Self-Employment)
Required if you provide substantial services to guests
- Rental income treated as self-employment income — subject to SE tax (~15.3% on net earnings up to the SS wage base)
- Business deductions still apply, but losses are not subject to passive activity rules
- QBI deduction (Section 199A) may be available for qualifying business income at federal level
- California does not conform to the federal QBI deduction — no equivalent state deduction
No income ceiling
Depreciation
Depreciation for LA Rental Properties
The IRS allows you to deduct the cost of your building (not land) over its useful life — creating a non-cash deduction that can shelter significant rental income.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Land value excluded; allocate purchase price between land and building. California conforms to this federal rule. |
| Appliances & furniture | 5 years | Personal property used in rental; bonus depreciation or Section 179 may accelerate deduction federally (California does not fully conform to bonus depreciation). |
| Carpets & flooring | 5 years | Treated as personal property if easily removed; otherwise may be 27.5-year property. |
| Land improvements (fencing, landscaping) | 15 years | Separate from the building; straight-line depreciation applies. |
California does not conform to federal bonus depreciation (100% first-year) or the full Section 179 expensing limits — California has its own lower Section 179 limit. Consult a tax professional for California-specific depreciation adjustments.
When you sell the property, the IRS recaptures depreciation previously claimed at a maximum federal rate of 25% (unrecaptured Section 1250 gain). California taxes this gain at your ordinary state income tax rate (up to 13.3%).
Transient Occupancy Tax (TOT)
Los Angeles Transient Occupancy Tax
The City of Los Angeles imposes a 14% TOT on all short-term stays of 30 days or less — hosts are legally responsible for collecting it from guests and remitting it monthly.
The TOT is a pass-through tax: you collect it from your guest on top of the nightly rate and remit it to the City of Los Angeles Office of Finance. Failure to register or remit can result in penalties and back-tax assessments.
14% TOT + $3.10/night admin fee
City of Los Angeles Office of Finance — finance.lacity.gov/transient-occupancy-tax-requirements; Rent Responsibly LA — rentresponsibly.org/ca/los-angeles
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking (City of LA) | Airbnb collects and remits TOT directly to the City on behalf of hosts under its agreement with LA | TOT should not appear as your revenue — it flows through Airbnb. Confirm with Airbnb's tax collection page for your listing address. |
| VRBO / direct booking | Host collects from guest and remits monthly to City of LA Office of Finance | Add 14% TOT to the nightly rate, hold it in a separate account, and file monthly TOT return. |
| LA City Administrative Fee | Host remits $3.10 per night to the City as part of home-sharing registration | Track nightly count; remit with your TOT return or as directed by the home-sharing program. |
Properties in unincorporated Los Angeles County (outside city limits) are subject to the LA County TOT administered by the LA County Treasurer and Tax Collector (ttc.lacounty.gov/tot/), not the City of LA Office of Finance. Confirm your property's jurisdiction before registering.
Platforms
How Airbnb & VRBO Report Your Income
Understanding what each platform reports to the IRS — and whether it collects LA's TOT — is essential for accurate bookkeeping.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K if gross transactions exceed $20,000 and 200+ transactions (2025 threshold); otherwise Earnings Summary | Yes — Airbnb collects and remits LA City TOT under its agreement with the City | Annual Earnings Summary available in host dashboard by January 31 |
| VRBO / Vrbo | Form 1099-K if gross transactions exceed $20,000 and 200+ transactions (2025 threshold) | Partial — check VRBO's tax collection page; host may still need to remit TOT directly | Annual earnings summary available in host account |
| Direct bookings | No platform reporting — host is solely responsible for reporting income | No — host must collect 14% TOT from guest and remit monthly to City of LA | Maintain your own records; no third-party form issued |
Hosting on Multiple Platforms?
Aggregate all gross income from every platform plus direct bookings onto a single Schedule E (or C). The IRS 1099-K threshold applies per platform, but you must report all income regardless of whether a 1099-K is issued. Keep separate records per platform to reconcile gross receipts against any 1099-Ks received.
US Equivalent: IRS Form 1099-K Reporting
The US does not use the EU DAC7 framework. Instead, platforms file Form 1099-K with the IRS for qualifying hosts. The 2025 threshold is $20,000 in gross transactions AND more than 200 transactions. Note: the IRS has proposed lowering this threshold to $600 in future years — check IRS.gov for the latest guidance.
Airbnb Help Center — airbnb.com/help/article/414; IRS — irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping
Illustrative P&L — Schedule E Host, Los Angeles
Example only using realistic LA figures. Not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep
The IRS and California FTB can audit rental returns — good records protect every deduction you claim.
| Keep | How long | Why |
|---|---|---|
| Booking records (dates, guest names, nightly rate, platform) | At least 3 years after filing (7 years if substantial underreporting risk) | Proves rental days vs. personal-use days for expense allocation and TOT compliance |
| TOT registration certificate and monthly remittance receipts | Indefinitely while operating; 4 years after last remittance | City of LA can audit TOT compliance; certificate proves lawful registration |
| Receipts for all deductible expenses (repairs, cleaning, supplies, fees) | At least 3 years after the return due date | Required to substantiate deductions on Schedule E if audited by IRS or FTB |
| Depreciation schedules and property purchase documents | For as long as you own the property, plus 3 years after sale | Depreciation recapture on sale requires full history of deductions claimed |
| Platform 1099-Ks and earnings summaries | At least 3 years after filing | IRS matches 1099-K amounts to your return — discrepancies trigger notices |
California's FTB has a 4-year statute of limitations for assessments (vs. the federal 3-year rule) — keep California-specific records for at least 4 years after the return due date.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
All figures are sourced from official government and authoritative sources as of 2024–2025. Tax rules change — always verify current rates and thresholds with the relevant authority before filing.
- City of Los Angeles Office of Finance — Transient Occupancy Tax Requirements — Confirms 14% TOT rate, 30-day threshold, registration requirement, and monthly remittance obligation. finance.lacity.gov/transient-occupancy-tax-requirements
- LA County Treasurer and Tax Collector — Short-Term Rentals & TOT — Covers TOT for unincorporated LA County areas. ttc.lacounty.gov/str/ and ttc.lacounty.gov/tot/
- IRS — Tips on Rental Real Estate Income, Deductions and Recordkeeping — Federal rules for reporting rental income, allowable deductions, and recordkeeping. irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping
- Airbnb Help Center — US Tax Documents — Explains Form 1099-K thresholds, 1099-MISC, and earnings summary issuance. airbnb.com/help/article/414
- Rent Responsibly — Los Angeles STR Information — Summarises LA home-sharing ordinance, $3.10/night admin fee, and TOT registration requirement. rentresponsibly.org/ca/los-angeles/
- California Franchise Tax Board (FTB) — California conforms to federal depreciation for residential rental property (27.5 years); state income tax rates 1%–13.3%. ftb.ca.gov
- H&R Block — Airbnb Host Reporting Guide — Explains Schedule E vs. Schedule C classification for STR hosts and the 14-day personal-use rule. hrblock.com
Questions
Frequently Asked Questions — LA Short-Term Rental Taxes
Mr Props Team
Property & Short-Term Rental Tax specialists
Make Tax Season a Non-Event
Mr. Props tracks your STR income, expenses and remittances all year, so your California filing is ready to file instead of reconstructed in a panic.
Join Hosts Running Smarter Portfolios
Monthly tactics on STR tax, pricing and operations — written for operators, not accountants.
No spam. Unsubscribe anytime.