Question: STR to LTR Strategy with Bonus Depreciation and Furniture

[Kyle Colquitt]

I'm considering purchasing a property this year and operating it as a short-term rental (STR) for the rest of 2025. The plan is to:

•  1. Self-manage and meet material participation (100+ hours, more than anyone else) and ensure average stay is <7 days

• 2. Furnish the property for guest use

• 3. Take 100% bonus depreciation on both the building (via cost segregation) and personal property (furniture/appliances)

• 4. Convert the property to a long-term rental (LTR) in 2026

Assuming 100% business use in Year 1, would this allow me to fully deduct the bonus depreciation (including furniture) against my W-2 and 1099 income? My spouse will not qualify as REP as she also has a W2 job.

Also, if I remove the furniture for personal use the following year, is there any recapture or penalty?

Looking for confirmation that this is a compliant approach and clarification on any pitfalls I should avoid. Thanks in advance!