STR tax calculator
What could a short-term rental save you in taxes?
Enter your taxable income and a purchase price. We'll estimate the first-year depreciation a short-term rental can create and what it could take off your federal tax bill.
Your numbers
Form 1040, Line 15: after your current deductions, not your salary.
Not sure what your taxable income is?
- Find your most recent Form 1040. Your CPA or tax software has it, or download a transcript at IRS.gov.
- Look at Line 15, "Taxable income." That's the number after your current deductions, and the one this strategy reduces.
- W-2, business or investment income? Wages and business income both flow into Line 15. Depreciation mainly offsets ordinary income, not capital gains.
Plan on roughly $12,000 to $18,000 per bedroom.
Share of the building a cost segregation study moves to 5, 7 and 15-year property. Typically 20% to 30%.
Estimated federal tax saved in year one
Where the deduction comes from
Your cash to get in
| Down payment | |
| Closing costs (about 3%) | |
| Furnishings | |
| Total cash needed | |
| After year-one tax savings |
Monthly mortgage (principal and interest, 30-year fixed)
Excludes taxes, insurance and HOA. The goal is a home whose bookings cover the mortgage and every operating cost.
What this means
Want these numbers in writing?
We'll email you this scenario and a straight read on whether a short-term rental fits what you're trying to do. We're operators, not CPAs, and we'll tell you if it doesn't.
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We'll send this scenario over and follow up personally. If it's urgent, call (601) 202-2025.
For illustration only, not tax or financial advice. Estimates use 2026 federal brackets and assume the owner qualifies under the short-term rental rules (average guest stay of 7 days or less, plus material participation), 100% bonus depreciation under current law, 20% of the price allocated to land, furnishings expensed in year one, and the rest of the building depreciated over 39 years. Rental income is assumed to cover the mortgage interest and operating costs, so only depreciation offsets your other income. State taxes are not included, and depreciation is recaptured when you sell. Talk to your CPA and a licensed mortgage professional before you invest.