Acquiring 2 STRs in 1 year

[Heidi Fischer]

Hello-I'd like opinions. I acquired 1 STR in Jan 2025 and it's going great. I would like to get another home this year but I'm wondering about the tax implications. Can I take 2 STR "loophole" deductions in 2025? Or should I just buy 1 per year to keep it neat and simple? I do all the work-material participation and I'm trying to use the STR bonus dep to get a savings in high income W2. Also does anyone know if bonus depreciation will go back to 100%? Thanks!

[Stephen Nelson]

You can use a cost segregation study and bonus depreciation on more than one property.

Also just to confirm this, if your average rental interval is 7 days or less and you materially participate? Section 469 doesn't limit the losses the depreciation generates because they're not passive. The losses are nonpassive.

But if you really go gangbusters with this, there are other limiters. One you may encounter is the Section 461(l) excess business loss limitation. Basically it says you can shelter any amount of business income with a business loss (like from a STR). But you're limited in the amount of business loss you can use to shelter nonbusiness income like W-2 income and portfolio income.

In 2025, the excess business loss limitation is $313,000 for single filers and $626,000 for joint return filers.

Example: You have no business income, are single, generate $1,000,000 on your W-2 and lose $500,000 on your STRs. You can use only $313,000 of the business losses from the STRs to shelter up to $313,000 of the W-2 income.

The unused excess business losses then turn into net operating losses and carryforward to the next year.