Bonus depreciation on airbnb property

2 Replies

Originally posted by @John Zhang :

Does anyone know if I can do a cost seg and use bonus depreciation on a short term rental property to offset my w2 income, if I don’t have real estate professional status?

STRs if the average stay is less than 7 days, it's not considered a rental activity. If its not a 'rental activity' then its not subject to passive loss limits like other real estate. However you need to have "material participation' in the STR, which can be difficult for many, especially if it is out of state. But if you meet these requirements, the depreciation can be used against your W2. Make sure to discuss with your accountant.

Check out the rules here: 

Treas. Regs. Sec. 1.469-1T(e)(3)(ii)(A):https://www.law.cornell.edu/cfr/text/26/1.469-1T

Shoutout to @Brandon Hall and his ever informative FB group, where this topic is discussed extensively.