Short-term rental
CSSI case study
- Purchase price (less land)
- $1,208,500
- Placed in service
- Dec. 2025
- Tax year applied
- 2025
- Bonus depreciation
- 100%
- Increased deduction
- $447,753
- Tax rate
- 37%
- First-year tax savings
- $165,669
Short-term rentals
Furnished rentals carry more short-life property than most owners expect.
Furniture, fixtures and finishes sit on 5- and 7-year lives, which is why smaller short-term rentals often still pencil out.
Do I need real estate professional status to use the losses?
Not necessarily. Rentals with an average guest stay of seven days or less generally aren’t treated as rental activities under the passive loss rules. If you materially participate, the losses may offset other income. Confirm your facts with your CPA.
My property was only $600K. Is it big enough?
Often, yes. The question is whether the projected benefit clears the fee, not a set purchase price. Your free estimate answers that.
What if I convert it to a long-term rental later?
Depreciation already claimed stands. How future losses are treated changes going forward, and recapture is evaluated at sale. Worth modelling with your CPA before converting.