🇺🇸 Could Trump shock AirBNB investors & markets with STR Tax Loop Hole Re-Up?

[AJ Wong]

It's no secret that President Trump wants to extend (and make permanent) his first-term tax cuts - part of that proposal includes reinstating 100% accelerated depreciation aka - The Short-Term Rental (STR) tax loophole. This strategy allows real estate investors to significantly reduce rental income tax by offsetting earned income with real estate losses. If renewed, it could (once again) unlock major tax advantages for W-2 earners investing in STRs.

There are several articles that do an exceptional job of explaining who, what, where, why and how tax payers qualify for the STR Tax Loophole - one I often share with client and in our STR newsletter was written by Joe Chiappias with Taxclimate.com.

📝 The Short Term Rental Tax Loop Hole: A Game Changer for W-2 Wage Earners

"What’s the Big Deal?

Normally, the IRS wants you to depreciate your rental property over 27.5 years (39 for commercial properties). That’s like watching paint dry, but slower. Cost segregation says, “Let’s speed this up, shall we?”

Here’s how it works:

Accelerate, Accelerate, Accelerate: Many of these components can be depreciated much faster – think 5, 7, or 15 years instead of 27.5. It’s like going from a tricycle to a sports car in terms of depreciation speed.

Front-Load Your Savings: By accelerating depreciation, you’re potentially creating larger tax deductions in the early years of ownership. That means more money in your pocket now, when you likely need it most."

The implications for the Oregon and California Coastal STR markets are clear- the buyer pool for luxury rentals in the $500K–$1.5M+ range is poised to grow. These deductions become more powerful as property values increase and can, in some cases, offset the entire net investment, including the down payment, for high-income earners.

What do you think - will the STR loophole be extended?