STR tax Loophole vs MTR?

[Amy Houghton]

Just wondering if the STR tax loophole can also be applied to midterm rentals at all against your W2. Especially if you are involved with cleaning and stocking, ect.

[Vivian Yip]

Quote from @Amy Houghton:

Just wondering if the STR tax loophole can also be applied to midterm rentals at all against your W2. Especially if you are involved with cleaning and stocking, ect.

 Hi Amy,

Great question. I'm speaking from experience as an operator and investor and my own tax experience. There are two main tests for the STR loophole:
1) Material participation
2) 7 days or less is the average stay

Therefore, in the real estate world, MTR is usually 30 days and more and would fail the second test.  As I understand it, you can operate as a STR first, take the benefits, the transition to MTR later. 

Hope this helps!
Vivian