Average stay calculator
Average stay is total nights divided by the number of reservations — not by 365, and not by occupied days. If that average is 7 nights or fewer, the property falls outside the definition of a rental activity, which is the first of several gates a loss has to pass.
Every night a paying guest stayed, added up across the year.
Separate bookings — not guests, and not nights.
Average stay
4.58 nights
This is 7 nights or fewer, so the property is outside the definition of a rental activity under the seven-day exception. That clears one gate only — the loss is still passive unless you also materially participate.
How this was computed
284 nights ÷ 62 reservations = 4.5806. Not divided by 365, and not by the number of days the property was occupied.
Reg. §1.469-1T(e)(3)(ii)(A) — average period of customer use = total days of use ÷ number of periods of use
Common questions
- How is average stay calculated?
- Total nights booked divided by the number of reservations. It is not divided by 365, and not by the number of days the property was occupied. A property with 284 nights across 62 reservations averages 4.58 nights.
- Does an average stay of 7 days or fewer make my losses non-passive?
- No, and this is the most common misunderstanding. It removes the property from the definition of a rental activity, which clears one gate. You must separately materially participate under one of the seven tests before a loss can offset other income.
- Which reservations count toward the average?
- Periods of customer use during the tax year. Nights you or your family stayed are personal use, not customer use, and they are handled by a separate rule under section 280A.
- What if my average is over 7 days?
- The seven-day exception does not apply, but two other routes remain: an average of 30 days or fewer where significant personal services are provided, and real estate professional status with material participation.
Next
Clearing the seven-day test only opens the door. The hours test is what decides whether the loss reaches your other income — check it with the material participation checker, or model the whole year in the estimator.