If I was paying $1mil (or perhaps more realistic $250k) in tax a year, I would/could be ridiculously happy! 

Without diving into the cleaning fee and sales tax as a portion of the ADR, we can keep it simple with a "what does it gross gross for the year" and there's a wide range.

Vacation homes take some planning, I personally think shooting for break even profit/loss with a vacation home is a good tax strategy but if it is a cash cow I would gladly just pay the tax as you still come out significantly ahead and if you have one I probably wouldn't bother with a cost seg study unless you are getting extremely high rents.

So its important we figure out which income is characterized under this tax as well.WA is nice because there is no capital gains and or state income tax, however RE excise taxes are around 1.78% of the gross sales price and sales tax is about as high as LA county in CA.I prefer a non tax state but if the deal is "good enough," overall I would still consider a tax state like CA if a quick sale wasn't in the short term game plan because I wouldn't want my long term capital gains to be subject to the state income tax.

You need to "change your facts to change your tax" as the great tom wheelright put it.

Thank you for your responses.From my understanding Airbnb automatically collects tax depending on the location.On setting up the VRBO listing, there were three options regarding how to collect taxes:Collect a tax per person per night (collect at check-in) then you would be prompted to place an amountCollect tax as percentage of rental amount(during booking) then you would be prompted to place a percentage Do not include taxes (I am collecting and remitting as required) I do not know where to check which one I should choose?

Hey Kymberly, what if you could pay 0% tax? 

@David LopezI use turbo tax as well and have 19 rentals.

Then as long as you don’t have a job back in MA (or you’d be taxed there anyway) and your properties aren’t in states with income tax (as they would tax you anyway) as long.

the way the multimillionaire do it is to delay and defer tax as much as possible, so after the accumulate so many loss then when you sell one for profit for example from flip/rent strategy, you could use it to offset the gain