For context: 100% bonus depreciation is permanently back. This means ALL assets with a useful life under 20 years can be deducted in full in year one. 1 - Furniture & Design I always make my Airbnbs stand out with amazing themed designs... This includes furniture, rugs, linens, kitchenware, appliances, electronics, etc... Since these items have <20 year "life", they reduce my taxable income. 2 - Amenities I also build a great guest experience with amenities like game rooms, barrel saunas, movie theaters, putt putt courses, etc. Almost all qualify for 100% bonus depreciation too. So If you spend $60k on furniture & amenities, you can deduct $60k from your taxable income that same year. 3 - Operating Expenses People always ask "isn't it expensive to run an Airbnb?" Sure, but all those "costs" are also tax deductions. Gas, electricity, water, insurance, property taxes, cleaning, HOA fees, software, repairs, landscaping, etc... these can be deducted YEARLY! 4 - Property Depreciation (the big one) 100% bonus depreciation also applies to the property itself. But you need to run a cost segregation study to separate the "parts" that qualify (usually 25-30% of the purchase price). e.g. On a $500K property, that's ~$125K you can deduct in year one. 5 - Mortgage interest Since interest is a "business expense", you can also write this off. To apply the write-offs to your active income (W-2 or 1099), you need to qualify for the STR loophole: → Guest stays are 7 days or less → You work 100h+ & more than anyone else (or 500h+ total) This is why my wife & I buy 2-3 new properties every year... Because it allows us to build long-term wealth, cash flow tens of thousands, AND reduce or eliminate our taxes. If you want a free full video breaking down of 100% bonus depreciation... DM me TAX and I'll send it over.
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