How the STR Tax Loophole Works: 4 Steps to Lower Taxes

This content is not tax or financial advice for you. Please talk with a CPA to find what's right for your situation.

What you get

A bigger write-off this year

A cost segregation study moves 20–30% of your building into parts you can write off in year 1. That can lower the tax on your W-2 income.

Proof that holds up

We check your average stay and keep a time-stamped log of your hours. Your deduction rests on records, not guesses.

One package for your CPA

Study schedule, stay report and hour log in one place, ready for your tax preparer.

How it works in 4 steps

1. Check you qualify

You Take the 2-minute quiz.

We Show whether you pass the 3 tests and estimate your savings.

2. We commission your study

You Send your closing statement and any upgrade receipts.

We Order your cost segregation study from a professional provider and check it against your closing statement.

3. We check your stays and hours

You Upload your Airbnb or VRBO booking export. Log your hours as you go.

We Confirm your average stay is 7 days or less. Track your hours against your cleaner's.

4. Your CPA files

You Share the package with your CPA.

We Deliver the study schedule, stay report and hour log, reviewed by an independent cpa firm.

You pay 10% of your tax savings only after step 4, and only if your tax goes down.

What it's worth

Example: a $600,000 rental bought in April 2026, married filing jointly, in a state with no income tax. Estimated federal tax saved in year 1: about $28,368 (likely $23,014 to $33,512). Your numbers will differ. → Run your own numbers

What it costs: 10% of your tax savings, only if your tax goes down. Cost segregation study included — $0 upfront for our first 10 customers, about $2,500 elsewhere.

What your CPA receives

1. Cost segregation schedule

Your purchase price minus land, split into 5-year, 15-year and 27.5-year parts. Your CPA attaches it to Form 4562.

2. Stay report

Total nights, number of stays, cancelled bookings removed, and stays that cross Dec 31 flagged.

3. Time-stamped hour log

Every entry is time-stamped and can't be back-dated. That's what makes it hold up.

What we don't do

We don't prepare or sign your tax return. Your CPA does.
We don't give legal advice or set up LLCs. Talk to a real estate attorney for that.
We don't promise an audit result or a refund amount. Anyone promising "audit-proof" is overselling.
We never charge an upfront fee. Our fee is 10% of your tax savings, only if you save.

The IRS rules behind this (for you and your CPA)

Rule	What it means for you	Source
7-day average stay	If guests stay 7 days or less on average, it isn't a "rental" under the passive rules.	Treas. Reg. § 1.469-1T(e)(3)(ii)(A) · eCFR
Hands-on hours	You (with your spouse) need 100+ hours and more than anyone else, or 500+ hours.	Treas. Reg. § 1.469-5T · eCFR
100% bonus depreciation	Parts of a rental bought after Jan 19, 2025 can be written off in full in year 1.	IRC § 168(k), Pub. L. 119-21
Yearly loss cap	In 2026, business losses over $256,000 (single) or $512,000 (joint) move to next year.	IRC § 461(l), Rev. Proc. 2025-32
Personal-use days	Staying there more than 14 days, or 10% of rented days, blocks the loss.	IRC § 280A(d)(1)
Quality study standards	What the IRS looks for in a cost segregation study.	IRS Pub 5653
Depreciation tables	How the rest of the building is written off over 27.5 years (e.g. Jan 3.485%, Apr 2.576%, Dec 0.152%).	IRS Pub 946, Pub 527

Frequently asked questions

What does a cost segregation study do?

A cost segregation study separates parts of your property—like appliances, cabinets, dedicated wiring, decks, hot tubs, and landscaping—into 5-, 7-, and 15-year buckets instead of the slow 27.5-year building schedule. Those shorter-life parts can then be written off much faster in year 1. (IRS Publication 5653; IRC § 168.)

Who prepares my study?

We commission your cost segregation study from a professional cost segregation provider. Every study meets and exceeds the standards the IRS sets out for a quality study in its Cost Segregation Audit Techniques Guide (Publication 5653). We check the result against your closing statement before it goes to your CPA.

Do you replace my CPA?

No, we do not sign tax returns or replace your CPA. We prepare your cost segregation study package, stay-length check, and time-stamped participation log so your CPA can file with clean workpapers.

When do I pay the 10% fee?

Only after your study and qualification package lower your tax bill—either through a smaller quarterly estimated tax payment or less tax owed on your annual return. If there is no tax savings, you owe $0.

What if my state doesn’t follow bonus depreciation?

States like California, New York, New Jersey, Pennsylvania, Hawaii, Massachusetts, Minnesota, and Wisconsin do not follow federal bonus depreciation. When you pick one of those states in our estimator, we use regular state depreciation only and explain the difference.

Can I do this for a rental I bought in an earlier year?

Yes, your CPA can use a look-back study and Form 3115 to claim missed depreciation from an earlier year on this year’s return without amending prior returns. (IRC § 481(a); Form 3115.)

What happens to my data?

Your booking files are read inside your browser and aren't uploaded unless you click "Save to my account." Your hour log is stored in a private account only you can see, and you can delete everything in one click. If you join the Founding offer, we share your records only with your study provider and the reviewing CPA firm. → Privacy policy