Free · No signup · Updated for 2026
Short-Term Rental Tax Savings Calculator
Estimate your first-year deduction from cost segregation and 100% bonus depreciation — including the loss limits and recapture that most calculators quietly leave out.
Educational estimates only — not tax, legal, or financial advice. Confirm everything with your CPA.
Estimated first year
Estimated first-year federal tax savings
$41,268
$36,642 of this comes from the cost segregation study · effective on your 2026 federal return
Year-1 depreciation
$190K
Accelerated basis
$157K
Marginal rate
32%
Where the depreciable basis lands
$181,520 of $545,000 is bonus-eligible in year one.
That number is a projection. This is what makes it real.
The deduction above only offsets your W-2 income if the activity is non-passive. Three things decide that — and the IRS tests all three.
1. Is your average guest stay 7 days or less?
2. Do you self-manage, or is there a property manager or co-host?
3. Do you have contemporaneous records of your hours for this year?
Three things other calculators don’t show you
Every one of these reduces the headline number. We’d rather you find out here than in April.
The excess business loss cliff
OBBBA reverted §461(l) thresholds to their original TCJA levels. For 2026 the cap is $256,000 single / $512,000 joint — down from $313,000 / $626,000 in 2025. Losses above it don’t vanish, but they carry forward as an NOL instead of offsetting this year’s W-2.
Depreciation recapture
Cost segregation moves basis into §1245 personal property, which recaptures at ordinary rates on sale — not the 25% unrecaptured §1250 rate. Accelerating is a timing benefit plus a rate arbitrage, and the arbitrage can run backwards unless you hold, 1031, or die with it.
State non-conformity
This calculator is federal only. California doesn’t allow bonus depreciation at all, and several other states decouple partially — so your state return may show a very different number and require a separate depreciation schedule.
How this is calculated
The formula
building_basis = price × (1 − land %)
accelerated_5yr = building_basis × 5-yr benchmark
accelerated_15yr = building_basis × 15-yr benchmark
bonus_year1 = accelerated_5yr + accelerated_15yr + furniture
residual = building_basis − accelerated_5yr − accelerated_15yr
straight_line = residual ÷ recovery period × mid-month factor
(39 yrs for STRs with ≤7-day stays; 27.5 yrs otherwise)
total_year1 = bonus_year1 + straight_line
loss = total_year1 − (rents − opex − interest)
usable = min(loss, §461(l) threshold)
savings = tax(income) − tax(income − usable)Where the reclassification percentages come from
Median results across 8,000+ completed cost segregation studies: furnished short-term rentals reclassify 29.8% of depreciable basis (19.2% into 5-year, 10.9% into 15-year), single-family rentals 18.3%, and condos 14.4%. Furnished STRs reclassify roughly 63% more basis than unfurnished single-family rentals, because furniture, fixtures and equipment are 5-year personal property. Your actual study will differ — these are medians, not promises.
Why STRs use a 39-year recovery period here
A dwelling only counts as residential rental property (27.5-year) if it’s used on a long-term basis. When average guest stays are 7 days or less, the property is generally treated as transient-use — nonresidential real property with a 39-year recovery period. That only affects the small straight-line residual (the bonus portion is unchanged), but most STR calculators get it wrong in the optimistic direction. Single-family rentals and condos here use 27.5 years.
Why savings aren’t just loss × your tax rate
A large deduction pushes you down through brackets rather than shaving the top one. This calculator computes your actual 2026 federal tax with and without the loss, using the published bracket tables and standard deduction, and reports the difference. A flat-rate multiplication — what most STR calculators do — overstates the benefit for anyone whose loss spans more than one bracket.
What this deliberately ignores
State income tax, self-employment tax, NIIT, AMT, itemized versus standard deduction interactions, QBI, prior-year passive loss carryforwards, partial-year ownership, and the §469 grouping election. It also assumes the property is your only business activity for §461(l) purposes. This is a directional estimate for deciding whether to have a real conversation with a CPA — not a return.
Looking at long-term rentals or REPS instead? Use the cost segregation calculator, which covers LTR properties and the 750-hour real estate professional path.
Frequently asked
What is the short-term rental tax loophole?
If the average guest stay is 7 days or less, the activity is not a rental activity under section 469, so it escapes automatic passive classification. If the owner also materially participates, the loss becomes non-passive and can offset W-2 and other ordinary income without real estate professional status.
How many hours do I need for material participation?
The commonly used test is 100 hours and more than any other individual, including cleaners, handymen and co-hosts. Alternatives are 500 hours, or performing substantially all of the participation yourself.
Is 100% bonus depreciation still available in 2026?
Yes. The One Big Beautiful Bill Act made 100% first-year bonus depreciation permanent for qualified property acquired after January 19, 2025.
Do I need a cost segregation study?
To accelerate the building’s components, yes. Engineering-based studies typically run $2,000 to $5,000 for a residential short-term rental. Furniture and equipment are already 5-year property and do not require a study.
What happens when I sell?
Depreciation is recaptured. Section 1245 personal property recaptures at ordinary income rates; real property is unrecaptured section 1250 gain taxed at up to 25%. A 1031 exchange defers it and a step-up at death eliminates it.
Does this calculator store my information?
No. Every calculation runs in your browser. Nothing is submitted, stored, or sent anywhere.
The deduction is math. The hours are evidence.
HourProof logs your material participation as it happens — timer, photos, receipts, and a CPA-ready export that holds up when someone asks for proof.
Not tax advice. This calculator produces directional estimates using published benchmarks and generalized assumptions. Your facts — basis allocation, participation, entity structure, state, and prior-year carryforwards — will change the result. Confirm everything with a licensed CPA before filing or making a purchase decision.
Sources: IRS 2026 inflation adjustments · IRS bonus depreciation guidance · Form 461 instructions