Bonus Depreciation Calculator for Short-Term Rentals: How to Estimate Your 2026 STR Tax Savings

Why STR Owners Are Searching for a Bonus Depreciation Calculator

If you own a short-term rental, you have a once-in-a-decade tax planning window. The combination of three rules makes STRs uniquely powerful in 2026:

1. 100% bonus depreciation is permanent again under the One Big Beautiful Bill Act (OBBBA) for property placed in service after January 19, 2025.
2. The STR loophole lets owners with average guest stays of seven days or fewer treat losses as non-passive — meaning they can offset W-2 wages, business income, and other active income.
3. Cost segregation studies routinely reclassify 20–35% of an STR's basis into 5- and 15-year property — all of which is now eligible for 100% first-year write-off.

The math is real. A $750,000 STR can generate $150,000–$250,000 of first-year deductions for an owner who materially participates. At a 35% marginal rate, that is $52,500–$87,500 of tax savings in year one.

But the math is also nuanced. To estimate accurately, you need to plug in the right basis, the right cost-segregation percentages, the right business-use percentage, and the right marginal rate. That is exactly what our free rental tax calculator is built to do — and this guide walks you through every input.

Quick start: Skip to the worked example to see the calculator in action, or jump to the step-by-step inputs section.

What Counts as a Short-Term Rental for Bonus Depreciation?

Bonus depreciation rules and the STR loophole rules are independent — but most STR owners want to qualify for both, because the loophole is what unlocks the immediate tax benefit.

For bonus depreciation, any rental real estate qualifies for the 100% write-off on assets with a recovery period of 20 years or less. You do not need to hit any STR threshold; bonus depreciation applies to long-term rentals too.

For the STR loophole (treating losses as non-passive under IRC §469), you need:

• Average guest stay of 7 days or fewer, or
• Average guest stay of 30 days or fewer plus substantial personal services (think hotel-style amenities)
• Material participation, typically met under the 500-hour test or the "more than anyone else" test

If you only get the bonus depreciation but not the loophole, your losses are passive and limited. The calculator handles both cases — but the savings figure changes dramatically.

The Three Numbers That Drive Your Calculation

Every STR bonus depreciation estimate comes down to three inputs. Get these right, and the rest is arithmetic.

1. Depreciable Basis (Building Only, Not Land)

Start with your purchase price plus closing costs, minus the value of land. Land is never depreciable.

Rule of thumb: Use the property tax assessor's land-to-improvement ratio — usually 15–25% land for residential STRs in vacation markets, higher in urban areas.

For a $900,000 purchase with $20,000 of capitalizable closing costs and a 20% land allocation:

• Total basis: $920,000
• Land: $184,000
• Depreciable basis: $736,000

2. Cost Segregation Reclassification Percentage

Without a study, your entire $736,000 depreciates straight-line over 27.5 years (~$26,800/year — boring). A cost seg engineer breaks the building into:

Typical reclassification ranges for furnished STRs:

• Standard residential STR: 18–25% to 5/7-year, 5–10% to 15-year
• Furnished vacation rental with amenities: 25–35% to 5/7-year, 8–12% to 15-year
• Resort-style STR with pool/landscaping: 30–40% combined short-life property

3. Business-Use Percentage

If you stay at the property for personal use, you must allocate. The IRS rule under §280A:

• Personal use ≤ 14 days and ≤ 10% of rental days → still treated as a rental, but you must prorate
• Otherwise → "residence" classification, with severe deduction limits

For a property rented 200 nights with 10 nights of personal use:

• Business-use % = 200 / (200 + 10) = 95.2%

Apply this to your depreciation: $736,000 × 95.2% = $700,672 effective basis.

A Worked Example: A $750,000 Airbnb

Let's run a realistic STR through the calculator end-to-end.

Property:

• Purchase price: $750,000
• Closing costs (capitalized): $15,000
• Land allocation: 18%
• Furnished, with hot tub, pool, and landscaped yard
• Placed in service: March 2026
• Personal use: 7 days; rental days: 240

Owner:

• W-2 income: $320,000
• Marginal federal rate: 35%
• State rate: 5%
• Combined marginal: 40%
• Materially participates (manages the listing, handles guest comms, schedules cleaners)
• Average guest stay: 4.2 nights → STR loophole qualifies

Step 1: Depreciable Basis

• Total basis: $765,000
• Land (18%): $137,700
• Depreciable basis: $627,300

Step 2: Business-Use %

240 / (240 + 7) = 97.2%

Adjusted depreciable basis: $627,300 × 97.2% = $609,736

Step 3: Cost Segregation Allocation

Resort-style STR → assume 28% to 5-year, 10% to 15-year, 62% to 27.5-year:

Total first-year depreciation: $243,155

Step 4: Tax Savings

• Federal savings: $243,155 × 35% = $85,104
• State savings: $243,155 × 5% = $12,158
• Total year-one tax reduction: ~$97,262

This assumes the loss is fully usable against the owner's W-2 income — which it is, because the STR loophole + material participation makes the loss non-passive. Without the loophole, the loss would be suspended under passive activity rules and carried forward.

How to Use the Bonus Depreciation Calculator

Our free calculator at /calculator is built around these same inputs. Here is the mapping:

1. Property purchase price → enter your full purchase price including capitalized closing costs.
2. Land value → enter the dollar value of land (or use the assessor's percentage and let the calculator back into it).
3. Property type → choose "Short-term rental" to enable the cost segregation defaults for furnished STRs.
4. Cost segregation → toggle this on. If you have a real study, enter your actual allocation percentages. If not, the calculator uses conservative defaults (22% / 8% / 70%).
5. Personal use days → only required if you used the property personally. The calculator computes the §280A allocation automatically.
6. Material participation → check this if you meet one of the seven tests. This drives whether the loss is treated as passive or non-passive.
7. Income and filing status → drives the marginal rate used for tax savings.

The calculator returns:

• First-year depreciation broken out by class
• Bonus depreciation eligible portion
• §280A allocation if applicable
• Estimated federal + state tax savings
• A multi-year depreciation schedule

Common Mistakes That Inflate the Estimate

The calculator is only as good as your inputs. These are the most common errors STR owners make when running their own numbers:

Skipping the Land Allocation

Land is not depreciable. Setting land = $0 and depreciating the full purchase price will overstate first-year deductions by 15–25%. Always pull the assessor's split or get an appraisal.

Assuming All Furnishings Are 5-Year

A $50,000 furniture package is 5-year (or even immediately deductible under the de minimis safe harbor if individual items are ≤ $2,500). But if you bought a furnished property, the furniture value is embedded in the purchase price and only a cost seg study can break it out. You cannot just add an extra $50,000 of 5-year basis on top.

Forgetting Personal Use

If you spent two weeks at the property and didn't track it, you may inflate the business-use percentage. The IRS expects you to count personal nights including stays during repairs (which generally do not count as personal — but only if you can document).

Misjudging Material Participation

If you have a property manager handling guest communications, cleaning, and bookings, you almost certainly do not materially participate — meaning even if you average a 4-day stay, the loss stays passive. The calculator surfaces this risk but cannot validate it for you. Read our material participation guide carefully before checking the box.

Stacking REPS Hours With STR Hours

Real Estate Professional Status and the STR loophole are different paths to the same destination (non-passive treatment). REPS hours from long-term rentals do not help you qualify for the STR loophole and vice versa. Don't double-count.

When Bonus Depreciation Is Worth Less Than the Calculator Says

A few situations where the headline number overstates real-world value:

• You don't have enough income to absorb the loss. Bonus depreciation creates a net operating loss (NOL) that can carry forward, but the time value of money matters. A $200,000 loss used over 10 years is worth meaningfully less than $200,000 used in year one.
• Depreciation recapture on sale. When you sell, §1250 recaptures depreciation at up to 25%. The 5-year and 15-year property is recaptured at ordinary rates under §1245. A 1031 exchange defers this; an outright sale does not.
• State conformity. Several states (CA, NY, NJ, others) decouple from federal bonus depreciation. The calculator's state savings figure assumes conformity — check your state's rules separately or see our state-by-state rental tax guide.
• AMT exposure. Large depreciation-driven losses can trigger AMT for high-income owners in certain configurations. The calculator does not currently model AMT.
• NIIT. If your net rental income is positive in future years, the 3.8% Net Investment Income Tax may apply unless the loophole continues to make the income non-passive.

When You Need a Real Cost Segregation Study

Calculator estimates are useful for planning. For your actual return, you generally need a formal study if:

• The basis is over $500,000
• You are claiming more than 20% reclassification to short-life property
• You expect the deduction to materially affect your tax liability and want audit protection

A study costs $4,000–$15,000 and pays for itself many times over on a six-figure deduction. The IRS publishes a Cost Segregation Audit Techniques Guide, and well-documented studies that follow it generally hold up under examination. DIY estimates from a calculator do not.

Run Your Numbers

If you bought, are about to buy, or are considering converting a property to a short-term rental, the bonus depreciation calculator will give you a defensible first-pass estimate of your year-one tax savings — with all the §280A, §469, and OBBBA mechanics built in.

Pair it with the common landlord tax mistakes checklist before you file, and the STR tax tips guide for ongoing operating-year deductions. And if your year-one number is in five or six figures, talk to a CPA about whether a formal cost segregation study makes sense — the calculator will tell you if it does.