Short Term Rental Loophole

Understanding the tax advantages and strategies for short-term rental properties

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What is the Short-Term Rental Loophole?

The short-term rental loophole refers to a tax strategy available under IRS rules that can provide significant tax benefits for property owners who rent their properties for short periods.

Key Benefits:

  • Potential for significant tax deductions
  • Ability to offset other passive income
  • Depreciation benefits
  • Deductible operating expenses

Requirements:

  • Average rental period of 7 days or less
  • Material participation in the rental activity
  • More than 50% of personal services performed during the year in real property trades or businesses
  • More than 750 hours of services performed during the year in real property trades or businesses