Short-Term Rental (Airbnb / VRBO)
STR cost segregation: $20K–$80K Year-1 deductions.
Material participation + furnished interiors = the most powerful Year-1 setup in real estate.
Real examples
What str cost seg looks like in practice.
Phoenix, AZ
Purchased $685K
Pool + fully furnished
Year-1 federal benefit
$58,200
Gulf Shores, AL
Purchased $615K
Beach STR with outdoor kitchen
Year-1 federal benefit
$52,688
Joshua Tree, CA
Purchased $540K
Hot tub + fire features
Year-1 federal benefit
$44,100
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Airbnb / VRBO operators meeting the material participation 100-hour or 500-hour test
- ✓Furnished short-term rentals (FF&E weight tilts the math toward 5-yr property)
- ✓Owners with W-2 or other active income to offset
Skip it when…
- ×Pure long-term rentals where you don't materially participate (losses get suspended)
- ×Owners in the 12% or 22% bracket — the cash benefit gets thin
Estimate
Run the numbers on your str.
Pre-set to STR defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings
$41,440
on $112,000 of accelerated deductions
5-yr15-yr27.5/39-yr
Study cost
$795
ROI on study
52×
Delivery
< 1 hour
Estimate based on RSMeans 2024 cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Before you order
Make sure you're not leaving STR deductions on the table.
Free 1-page checklist of the deductions STR owners miss most often — material participation hours, furnishings reclass, the 7-day rule, and the lookback play.