Free Tax Tool

Short-Term Rental Tax Savings Calculator

Estimate first-year tax savings from buying a short-term rental, and see what years 2 to 5 actually look like once cost segregation runs out. Want the full strategy? Read our guide to the STR loophole.
Property
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Typical: 15–25%

Building recovery period

Most STRs with average guest stays of 30 days or less are classified as nonresidential transient property and depreciated over 39 years. Properties with longer average stays may qualify as residential rental (27.5-year). This is a separate test from the 7-day passive activity rule.

Cost Segregation

A cost segregation study reclassifies portions of the building into shorter-life property. Actual results vary widely by property type, age, and finishes: these inputs are placeholders until you have a real study.

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Furniture, fixtures, appliances, removable items

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Land improvements, site work

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100% for property acquired and placed in service after Jan 19, 2025

Income & Tax
$

Rental income minus all expenses (including mortgage interest), but before depreciation. $0 = breakeven.

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2026 brackets: 24% / 32% / 35% / 37% top out at higher income levels

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Add your state's marginal income tax rate if applicable

Fill in all the property details to see your first-year savings.
✓ Unlocked — your results are saved. Keep adjusting any input; everything updates live and stays unlocked.
5-year cumulative savings
$0
Year 2 alone
$0

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Year-by-year breakdown: with cost segregation

Federal + state combined
Year Depreciation Net before dep. Tax loss / income Tax savings
5-year totals $0 $0 $0 $0

Year 1 building depreciation reflects the IRS mid-month convention, which treats real property as placed in service mid-month regardless of the actual date. Years 2 and after use full straight-line. The "missing" half-month gets picked up in the final year of the schedule.

Same property: without cost segregation

Straight-line on the full building
Year Depreciation Net before dep. Tax loss / income Tax savings
5-year totals $0 $0 $0 $0
Cost segregation adds $0 in 5-year tax savings on this property.

What this calculator assumes

  • The STR strategy actually applies. The numbers above assume your property meets the average-stay rule (≤ 7 days, or ≤ 30 days with significant personal services), you materially participate, and personal use is within the safe range.
  • Loss is fully usable. The calculator does not model basis limits, at-risk limits, the excess business loss limitation, NIIT, AMT, or state-specific rules that may further restrict the loss.
  • Cost seg results are estimates. Real cost segregation studies vary based on the property's actual components. The presets are reasonable starting points, not guarantees.
  • Building life depends on facts. An STR with avg stay ≤ 7 days is generally nonresidential transient property (39-year). The 27.5-year option is for properties that qualify as residential rental.
  • Mid-month convention applied to building. The first-year building depreciation depends on the placed-in-service month.
  • No mortgage interest schedule modeled separately. The "net before depreciation" input is meant to capture rental income net of all operating expenses including interest.
  • Years 2–5 hold inputs constant. Real income, expenses, and interest will change year to year.

This calculator is for educational and planning purposes only and does not constitute tax, legal, or investment advice. Actual tax outcomes depend on your full facts and circumstances. Consult a qualified CPA before relying on these projections.