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Estimate the first-year tax savings from a cost segregation study and bonus depreciation on your short-term rental — including the “STR loophole” that can offset W-2 and active income.
Estimates only, for illustration — not tax advice. Actual results depend on your cost segregation study, depreciation recapture on sale, passive-activity and material-participation rules, at-risk limits, and your specific facts. Bonus depreciation percentages reflect current federal law and may change. Confirm everything with a qualified tax advisor before acting.
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Book a free consultationHigh earners buy a short-term rental, run a cost segregation study to reclassify 20–35% of the building into 5-, 7-, and 15-year property, then apply bonus depreciation to deduct most of it in year one. If you materially participate and your average guest stay is seven days or less, the activity is not a passive rental — so the loss can offset W-2 and other active income. That is the “short-term rental loophole.”
Two dates, two different jobs.
The year you claim bonus depreciation is the year the property is placed in service — ready and available for rent. That is not necessarily the year you bought it, so a property purchased one year and first listed the next takes its deduction in the second year.
The rate you get is set by when you acquired it. 100% for property acquired after January 19, 2025. Property acquired on or before that date stays on the old phase-down, which is 20% for anything placed in service in 2026.
Acquisition is measured by the written binding contract, not the closing, and there is no election to opt into 100%.