"Is income from Airbnb and VRBO rentals subject to the same rules as regular rental activities?"
More and more people are diving into these short-term rentals, renting out a piece of their home or buying condos to rent out. Just by nature Airbnb and VRBO is still passive rental activity. So it would follow the same rules as regular rental activity with the exception if you are doing a VRBO or Airbnb where you are providing services, such as bed turn down services, food delivery, or If you're picking your guests up and driving them across town to a restaurant. Then the IRS says that you have a business and your earnings are going to be subject to self-employment tax.
It is important to look at what services you're going to provide and, if you are going to providing those services, it's important to get with your accountant and structure those in a way that you won't end up paying self-employment tax on the earnings. It's similar to what we mentioned earlier in the S Corporation article: You're adding 15.3% in Social Security and Medicare on top of your income tax to any earnings you have, if you're providing those services.
If you have any questions about your business, text them to me at 501-762-0116.