Blog
Guides to the short-term rental hour tests, the average-stay math, and the records that make a return defensible — grounded in the same engine that powers the estimator.
Qualification & the tests
Short-term rental tax benefits: do you actually qualify?start here
Four gates decide whether you get them: a seven-day average stay, material participation, the section 280A personal-use limit, and the loss caps.
6 Aug 2026
Active participation and the $25,000 rental loss allowance
A lower bar than material participation, worth up to $25,000 of rental losses — but it phases out by $150,000 MAGI and does not reach a seven-day STR.
6 Aug 2026
The 500-hour test: material participation with no comparison
Test 1 of the seven: more than 500 hours in the activity, measured against nobody else. The cleanest test to pass, and the hardest number to actually reach.
6 Aug 2026
How to qualify as a real estate professional
The requirements are two tests, eleven qualifying categories and one election — plus a participation record the tests themselves never mention.
6 Aug 2026
Section 280A personal use: the 14-day rule that voids a loss
Personal use above the greater of 14 days or 10% of days rented at fair value makes it a residence under §280A — deductions capped at rental income.
6 Aug 2026
Real estate professional tax status: what it does
The status turns off the per-se passive rule for your rentals. It is not a deduction, and it is not material participation — that still has to be proved.
6 Aug 2026
The short-term rental loophole, and why it is not one
The short-term rental loophole is a 1988 regulation, not a trick: a seven-day average stay plus material participation. What it saves, and what voids it.
6 Aug 2026
Short-term rental vs real estate professional status
REPS needs 750 hours plus more than half your working time in real property. A seven-day average stay needs neither — and REPS is not material participation.
6 Aug 2026
The 30-day rule: what significant personal services requires
The second exception is a 30-day average stay plus significant personal services. The regulation names what does not count — cleaning between guests is on it.
6 Aug 2026
The 7-day test: nights ÷ reservations, not nights ÷ 365
Average stay is total nights divided by reservations — not by 365. The exact formula, the common calculator mistake, and what passing actually changes.
24 Jul 2026
Proof & audit defense
The material participation test: how to prove your hoursstart here
Seven tests, and hours you cannot prove do not count. What a defensible log holds, why real-time beats reconstructed, and the cases that decide it.
6 Aug 2026
Barniskis v. Commissioner: bookkeeping is investor hours
A qualifying seven-day rental still lost. The hours were investor-type bookkeeping, and they could not beat the management company's participation.
6 Aug 2026
Birdsong v. Commissioner: why detailed spreadsheets won
Birdsong, T.C. Memo 2018-148: detailed spreadsheets plus credible testimony met the reasonable-means standard. Why the detail, not the file format, decided it.
6 Aug 2026
Eger v. United States: a management contract is not a lease
Eger v. United States, 9th Cir. 2020: a property manager cannot be recharacterized as your tenant, and the manager's hours still run against yours.
6 Aug 2026
Gragg v. United States: REPS is not automatic participation
Gragg v. United States, 9th Cir. 2016: real estate professional status is not material participation. That still has to be proved, activity by activity.
6 Aug 2026
Gregg v. United States: no proration for a short first year
Buy in October and the hour tests do not shrink to match. Gregg is the authority: §469 gives no proration for a short or first year of an activity.
6 Aug 2026
Hairston v. Commissioner: why a padded hours log lost
One-hour entries for trivial tasks, "supervising painting," weekly write-ups. In Hairston the padding was not trimmed — it discredited the whole log.
6 Aug 2026
Leyh v. Commissioner: a clean log earns benefit of the doubt
Leyh, T.C. Summ. Op. 2015-27: a clean real-time log won the benefit of the doubt on travel it had left out. Credibility is earned during the year, not at exam.
6 Aug 2026
Lucero v. Commissioner: travel time is not participation
A distant, manager-run short-term rental failed the hour tests. Travel time did not count, and the hours left could not beat the manager's.
6 Aug 2026
Mirch v. Commissioner: the on-call hours that sank an STR loss
Mirch claimed about 920 hours on a qualifying short-term rental and lost the whole deduction. 744.5 hours were on-call. Credible hours came in under 100.
6 Aug 2026
Moss v. Commissioner: no post-event ballpark guesstimate
Moss v. Commissioner, 135 T.C. 365 (2010): the regulations do not allow a post-event ballpark guesstimate, and being on call is not participation.
6 Aug 2026
Padda v. Commissioner: winning by significant participation
Padda, T.C. Memo 2020-154, won on test 4: over 100 hours in each of several activities, over 500 across them — plus the NIIT tail that comes with it.
6 Aug 2026
Penley v. Commissioner: when the hours stop being believable
About 2,520 hours claimed, with no start or stop times behind them. The court found the total implausible and discarded the log rather than trimming it.
6 Aug 2026
Pohoski v. Commissioner: the manager's hours decide yours
Pohoski won one condo and lost the other. The difference was proof of the manager's hours — the second leg of the 100-hour test nobody documents.
6 Aug 2026
Real estate professional status and the IRS
The status is claimed on the return and tested on the log. What examiners ask for, the standard the regulations set, and the records that have survived it.
6 Aug 2026
Sezonov v. Commissioner: why a rebuilt hours log lost
Sezonov v. Commissioner, T.C. Memo 2022-40: no log kept as the work happened, hours rebuilt afterward, dismissed as ballpark guesstimates.
6 Aug 2026
Windham v. Commissioner: what a defensible log looks like
One of the wins. A credible record kept as the work happened, backed by independent documents, held up alongside a part-time job in T.C. Memo 2017-68.
6 Aug 2026
Zarrinnegar v. Commissioner: a full-time job is not a bar
Zarrinnegar, T.C. Memo 2017-34: a full-time dentist won on a detailed real-time log. What makes claimed hours believable next to a demanding day job.
6 Aug 2026
How to prove your short-term rental hours: the 100-hour test
The 100-hour test is an hour race: more than 100 hours, and more than any other single person — usually your cleaner. What counts, and what never does.
24 Jul 2026
Money & mechanics
Depreciation on rental property: the short-term rental rulesstart here
Most short-term rentals depreciate over 39 years, not 27.5. How cost segregation, 100% bonus after 19 January 2025, and recapture at sale work.
6 Aug 2026
100% bonus depreciation: the 19 January 2025 acquisition line
100% bonus is permanent for property acquired after 19 January 2025. Acquired means the binding contract date, not the closing. Earlier deals stay on 40%.
6 Aug 2026
Cost segregation for short-term rentals: buckets and payback
A study splits building basis into 5, 7, 15 and 39-year buckets so bonus depreciation can expense the short-life ones in year one. Land never depreciates.
6 Aug 2026
Depreciation recapture when you sell a short-term rental
The cost-seg personal property recaptures as ordinary income at up to 37%; the building's depreciation is capped at 25%. Owed even if you never claimed it.
6 Aug 2026
Section 461(l): the 2026 excess business loss limit
For 2026 the excess business loss cap is $256,000 single and $512,000 married filing jointly. The overflow is not lost — it becomes an NOL carryforward.
6 Aug 2026
1099-K & bookkeeping
Your Airbnb 1099: why it never matches your depositsstart here
The 1099-K reports gross, before platform fees, remitted lodging tax and refunds. Every piece of the gap between the form and your bank, and how it is filed.
6 Aug 2026
The 2026 1099-K threshold: $20,000 and 200 transactions
For 2026 a 1099-K arrives only above $20,000 in gross payments and more than 200 transactions. The 1099-NEC minimum is $2,000. No form still means income.
6 Aug 2026
Airbnb host service fees: in the 1099-K, deducted not netted
The host service fee is withheld before your payout but still sits inside the 1099-K gross. Why it is deducted as an expense instead of netted out of rents.
6 Aug 2026
Are Airbnb cleaning fees taxable income? Yes — and not a wash
The guest's cleaning fee is rent under another name and sits inside the 1099-K gross. The cleaner's invoice is a separate deduction, not an offset against it.
6 Aug 2026
Gross or net on Schedule E: report the gross, deduct the fees
Schedule E line 3 takes the gross rent guests paid; platform fees come off on line 8. The tax is identical either way. The document matching is not.
6 Aug 2026
Occupancy tax included in your 1099-K: how to back it out
Lodging tax the platform collected and remitted can sit inside your gross 1099-K. It is the guest's tax — how to remove it without losing a real deduction.
6 Aug 2026
Airbnb refunds and cancellations inside the 1099-K gross
A refund does not reduce the 1099-K. Where refunds, cancellations, chargebacks and resolution-centre adjustments belong, and the record each one needs.
6 Aug 2026
A reservation spanning year end: which tax year it lands in
Check in 29 December, out 3 January. For a cash-basis owner receipt decides, the payout date usually settles it, and check-in is the standing proxy.
6 Aug 2026
Schedule E rental income: what goes on which line
Where short-term rental income and expenses land on Schedule E: which line takes what, the 39-year depreciation trap, and when it is Schedule C instead.
6 Aug 2026
Choosing a tool
Tax software for rental properties: an honest comparisonstart here
Hours trackers, bookkeeping tools, and the few that do both. What each is genuinely good at, what it costs, and how to tell which one your year needs.
6 Aug 2026
DeductFlow alternatives: records, books, or just hours
DeductFlow covers hours, expenses, mileage and cost-seg records, and states it is not bookkeeping. That scope decides between it, RentReel and the hours apps.
6 Aug 2026
Material participation trackers: what decides an exam
STRHours, REPSLog, DeductFlow and RentReel's hours side, compared on the four things Tax Court opinions actually turn on rather than feature counts.
6 Aug 2026
RentReel alternatives: what each one is actually for
RentReel ships the most complete short-term rental tax product today. The honest alternatives are narrower and cheaper. Which gap each one closes.
6 Aug 2026
REPSLog alternatives: which hours tracker fits your year
REPSLog is strong on multi-device logging, AI-assisted entry and the 750-hour path. Where STRHours, DeductFlow and RentReel fit better, and how to move safely.
6 Aug 2026
Spreadsheet or app for a material participation log
A spreadsheet can hold a defensible participation log — Birdsong won on one. What decides it is when the entries were written and what they point at.
6 Aug 2026
STRHours alternatives: when to pay for something else
STRHours already gives you a free tier, voice logging and booking-platform sync. When REPSLog, DeductFlow or RentReel is worth the money — and when it is not.
6 Aug 2026