Short-Term Rental Strategy for 2022 (Only 90 days left...)

[Jon Fletcher]

A buyer client asked me about the following scenario. Any advice? 

Two partners want to purchase a 2-family in their personal names or an LLC and close on December 28th  

Unit 1 comes with a long-term tenant

Unit 2 is vacant for short-term rentals

The second unit will be listed on AirBnB and rented for three nights: December 29-31. They'll do a cost segregation study for accelerated depreciation.

The Short-Term Rental (for only three nights) creates a significant loss for 2022 that can offset their W2 taxes. 

During 2023, they decide that AirBnB is too much effort and they want to rent Unit 2 on a 12-month lease

Questions: Do you foresee any issues with this scenario from a tax planning perspective? Can both partners take advantage of the losses for their W2 taxes?