THE STR TAX PLAYBOOK

Buy a home you love.
Rent it short-term.
Wipe out $70K+ in taxes.

One cost segregation study. One year of short-term guests. Your tax bill drops by $40K to $100K. The guests pay your mortgage.

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Takes 3 minutes. No account required.

1
The math

Redirect your taxes into a real asset

You're already paying $190K in taxes on $500K income. What if you redirected part of that into a short-term rental and kept the rest?

Configure your STR

Mid-range
Property price$500K
$200K$500K$1M
Renovation & furnishing$150K
$30K$150K$300K
Your cash outlay (5% down)
$25K down + $150K reno$175K

What happens to your $190K tax bill

You still owe
$69K
$190K before
You keep
$121K
back in your pocket
Your investment (assumes 5% down)
Down payment (5%)$25K
Renovation & furnishing$150K
Total cash in$175K
You own a $500K property
Investment gap (covered by property equity)
-$54K
You invest $54K more, but own a $500K property
The key insight: You're not spending extra. You're redirecting taxes you already owe into a property that earns income.

All figures assume $500K household income, MFJ, and Year 1 bonus depreciation via cost segregation.

2
Two paths

Buy a second home, or use the one you have

Both paths unlock the same deductions. Pick the one that fits your life.

Buy a vacation property

1

Find a place you actually want to visit

2

Put 5% down. Renovate and furnish it for guests

3

Run a cost seg study on the full property

4

List it on Airbnb. Guests cover your mortgage

5

Deduct the property, reno, furnishings, and operating costs against your W-2

Why this works

You get a vacation home you use yourself during off-peak weeks. Guests generate income year-round. The cost seg study front-loads 5 to 15 years of depreciation into Year 1. Your W-2 income drops on paper by tens of thousands.

3
Three rules

What makes it work

Meet all three and your STR losses become non-passive. They offset your salary, RSU income, and bonus. Dollar for dollar.

01

Short-term stays

Under 7 days average

Keep your average guest stay under 7 days. This one number reclassifies your rental from passive income to a business activity, and that distinction is what unlocks deductions against your W-2.

02

Manage it yourself

~2 hours per week

If you manage the property yourself in Year 1, this is very doable. Handling bookings, coordinating cleaners, communicating with guests. 100 hours across the year is roughly 2 hours a week.

03

Cost segregation

Expense property components

A cost segregation study breaks your property into its core components: flooring, cabinetry, appliances, landscaping. You expense them in Year 1 instead of spreading them over 27.5 years.

Meet all three and your STR losses become non-passive. That means they offset your salary, your RSU income, your bonus. Dollar for dollar.

See how much you'd save

Answer 7 questions. Get a personalized estimate across 50+ strategies, including the STR strategy, ranked by impact with clear next steps.

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This content is for educational purposes only and does not constitute tax, legal, or financial advice. Tax savings depend on individual circumstances including income level, filing status, state of residence, property specifics, and compliance with IRS requirements. All figures are educational estimates based on typical cost segregation allocations. Consult a qualified CPA or tax attorney before implementing any tax strategy.