Short-Term Rentals
A short-term rental can shelter your W-2 income.
Short stays change the tax math. An STR can be an active business whose losses offset your day-job income — done right — or an audit flag — done wrong. We keep Airbnb and VRBO operators on the right side and show net per listing.
Why STR books break standard accounting
Gross bookings aren't the same as net-to-host.
A short-term rental layers hospitality economics, active-business tax rules, and platform reconciliation on top of a real estate asset — and standard landlord accounting handles none of it.
Schedule C vs. Schedule E
Substantial services — cleaning, concierge, linen — can push an STR from passive Schedule E rent to active Schedule C business income, triggering self-employment tax. Knowing which applies changes your deduction profile and audit risk entirely.
The 7-day material-participation rule
If the average guest stay is under 7 days and you materially participate in the activity, STR losses become active losses that offset W-2 and other income. This is the mechanism behind the so-called STR loophole — and it has hard IRS tests that most hosts don't document.
Gross bookings aren't net-to-host
Cleaning fees, platform commissions, supplies, dynamic-pricing tools, and turnover labor sit between a booked night and your deposit. A P&L that starts with total bookings — not net-to-host — will overstate profit on every listing.
Occupancy tax the platforms miss
Airbnb and VRBO collect and remit lodging tax in many jurisdictions — but not all. Gaps in remittance, direct bookings, and local ordinances can leave operators with unfiled obligations they didn't know they had.
Where the real margin hides
Ten revenue lines — one deposit. Most hosts track zero.
An STR isn't a single nightly rate. Platform fees, ancillary charges, and direct-booking channels each flow differently — and the costs between them are what separate a profitable listing from a busy one.
Bookings vs. profit
A full calendar isn't the same as a profitable one.
Between a booked night and a deposit sits cleaning costs, platform fees, dynamic-pricing tool subscriptions, supply restocking, and turnover labor. We build per-listing P&Ls that start with gross bookings and end with actual net-to-host — so you know which listing earns and which one just looks busy.
The STR tax playbook
The deductions a rental schedule alone will never find.
Short-term rentals sit at the intersection of real estate, active business, and hospitality — each with its own tax lever. Handled right, the combination is significant cash. Handled wrong, it's an audit flag.
The STR loophole
Sub-7-day average stay plus documented material participation makes STR losses active — not passive — so they offset W-2 and other income dollar for dollar. Meeting both tests requires planning and contemporaneous records.
Cost segregation + bonus on furnishings
Appliances, furniture, and short-life personal property often qualify for 100% bonus depreciation — front-loading deductions in the acquisition year. A cost-seg study on the structure can accelerate the rest.
Schedule C vs. Schedule E
Substantial services push the activity from passive rent (Schedule E) to an active trade or business (Schedule C), with self-employment tax implications. Getting it right — or wrong — affects your deduction ceiling and audit profile.
Occupancy & lodging tax
Platforms remit on some jurisdictions but not all. Direct bookings, rural counties, and local ordinances create gaps. We map every listing to its obligations and file the ones the platforms miss.
QBI eligibility
If the STR activity qualifies as a trade or business, the 20% qualified business income deduction under §199A may apply — potentially one of the largest available deductions.
Entity & 1099-K reconciliation
1099-Ks reflect gross platform payouts, not net-to-host. Entity structure, multiple platforms, and co-host splits all create reconciliation complexity that must be documented before filing.
What we actually run for you
Every service mapped to a short-term rental problem.
The problem
Books wired to your STR platforms
We reconcile Airbnb, VRBO, Hostaway, and Guesty payouts straight to your ledger — cleaning splits, platform fees, 1099-K gaps, and all — so every listing is right each month, not just at tax time.
The problem
STR tax strategy (the loophole, done right)
We plan around the 7-day rule, material participation documentation, Schedule C vs. E classification, cost segregation timing, and QBI eligibility — so the deductions hold up, not just show up.
The problem
Lodging & occupancy tax compliance
Platform remittance covers some jurisdictions. We identify the gaps, handle registration and filing for the rest, and keep you current on short-term rental ordinance changes.
The problem
Per-listing P&L and forecasting
Net-to-host dashboards by listing, acquisition underwriting with projected RevPAR and break-even occupancy, and portfolio-level cash forecasting — so you know what to add and what to exit.
Buying or expanding your STR portfolio?
Numbers that survive due diligence.
Whether you're underwriting a first listing or a tenth, we build the financials that hold up when a lender, partner, or your own spreadsheet asks the hard questions.
The numbers we put in front of you
Run your STR portfolio on operator metrics, not just a P&L.
Reporting built for short-term rental operators — the KPIs that tell you whether to adjust pricing, add a listing, or exit an underperformer.
Figures shown are illustrative.
Keep exploring
Go deeper — or just talk to us.
Talk to someone who's actually filed an STR return.
A 30-minute call. Bring your Airbnb or VRBO payout statements and last year's return — we'll show you what your books should be telling you and whether you're leaving the STR loophole on the table, on a free intro call.
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