WOW watch out those partaking in the Airbnb trend to earn a few extra bucks. Remember the ATO has access to the internet too! This blog is from my friends at Nexia Accountants and I wanted to share with my connections as I know quite a few people who are participating in the sharing economy and might not be aware of the implications from the ATO.
"As mentioned in an earlier Top Tax Tips, the ATO is still focusing on money earned through the sharing economy (e.g. by providing ride-sharing services through Uber or by providing accommodation through Airbnb).
In particular, if you have earned money through renting out a room in a house that you have been using as your main residence, such income should be declared in your tax return and you will only be allowed to deduct the expenses that relate to the part of the house rented out. Furthermore, if you were to sell your main residence, you may have a potential capital gains tax liability (because the main residence was also used to generate income).
Please contact us if you are contemplating any such transactions which may affect your ability to claim the main residence CGT exemption on the sale of your property. The loss of this valuable exemption may well outweigh any benefit of renting a room in your main residence.
Please note that the ATO is not interested in taxing board-only arrangements entered into with family members because these are considered domestic arrangements. In such situations you also cannot claim income tax deductions for associated expenses (e.g. interest on your home loan)."
Contact your tax advisor if you need further information or advice on your personal situation.
Source: Nexia Accountants http://www.nexia.com.au/
