Own A Short-Term Rental?
Get the Most Out Of Your Investment Now!
Reduce Your Tax Burden
Short-term rentals can be a powerful investment for high-income earners, offering strong returns, appreciation potential, and valuable tax-saving opportunities.
Maximizing these benefits requires strategic tax planning. Whether you're purchasing your first property or managing multiple rentals, the right strategy can significantly reduce your tax liability.
At Shatley Accounting Group, we specialize in helping short-term rental investors minimize taxes, maximize opportunities, and build long-term wealth.
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Depreciating Your STR Property to Reduce Taxes on W-2 Income
Depreciation is a valuable way to save on taxes with your short-term rental property by spreading the property's cost over time. A cost segregation study can accelerate depreciation on certain parts of your property, increasing your tax benefits.
The study breaks your property into components that can be depreciated over 5 and 15 years. These typically make up 20–30% of your property's cost and can create significant losses that may help offset W-2 and business income and reduce your overall tax bill.
Combined with bonus depreciation, cost segregation can allow short-term rental investors to claim substantial deductions sooner.
Utilizing Your Short-Term Rental Property for Non-Passive Losses
Understanding passive and non-passive losses is key to maximizing tax benefits. Passive losses occur when you're not actively involved in an investment, often with long-term rentals. While these losses may offset W-2 income, limitations apply, especially for high earners who aren't real estate professionals.
Non-passive losses result from investments where you actively participate, such as a short-term rental business, and can offer greater tax advantages.
To have your short-term rental income and losses treated as non-passive, you must meet at least one of the IRS's seven material participation tests.
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Collaborate with Experienced Real Estate Tax Strategists
Qualifying as a material participant and using advanced depreciation strategies can be complex, making experienced tax planning essential. Whether you're purchasing your first short-term rental or already own multiple properties, Shatley Accounting Group can help.
Contact our advisors today to learn how short-term rentals may help reduce taxes on your W-2 income.