Short Term Rental Secrets Podcast The Tax Loophole That Can Wipe Out $40K (Even With 1 Property) | The STR Scale Show with Mike Reilly | Ep 21
Jul 17, 2025
Get ready to dive into the world of short-term rental tax strategies! Learn about the exciting tax loophole that can save you over $40K per property, thanks to the revived 100% bonus depreciation. Discover the essential criteria for qualifying for tax deductions, and find out how active management can unlock even more benefits. The episode also covers how cost segregation studies can supercharge your deductions and offers tips to avoid common pitfalls with IRS compliance. Don't miss these valuable insights!
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Mike Reilly's Tax Loophole Story
- Mike Reilly used this tax loophole four times on his short-term rental properties.
- It was the main reason he got into short-term rentals back in 2019 to reduce his tax burden.
STRs As Non-Passive Businesses
- Short-term rentals can be non-passive businesses if they meet specific criteria.
- This status allows owners to use losses to offset active income, drastically reducing taxes.
Qualify For Non-Passive Treatment
- To qualify for non-passive treatment, stays must average less than seven days and you must materially participate.
- Manage the property yourself, spending over 500 hours or more than anyone else in the first year.