STR Material Participation In The First Year - Bonus Depreciation

[Pierre E.]

Anyone have any information on when the material participation clock starts and hours you or others spend start counting? ( specifically for a property newly purchased mid tax year new to the investor — in this case using 100 hours more than anyone else for STR tax loophole)

Is it

a- it hours only once the property has been placed in service or

b- all hours of all people in the year it was placed in service?

c - all hours of all people are evaluated after date of ownership/closing in year property placed in service?

Thank your for your thoughts or pointing me in the right direction

If it helps i wrote two opposing scenarios:

——

Scenario 1: a property purchased in fall of the year, owner did DIY renovation's total 120 hours placed it in service as an STR, cleaner did 100 hours from service start date until end of year and owner did only 80 hours from service start date until end of year - (1st time ever placed in service was AFTER renovation only for stays averaging less than 7 days, no other prior uses under that owner). would owner meet criteria or no?

Scenario 2: a property was purchased in the beginning of a year and originally NOT intended for short term rental use but was never rented or marketed, and was renovated in a couple months by a contractor 350 hrs, and then the decision was made to turn it into a short term rental owner spent 400 hours in material participation after service start date others spent max 50 hours after service start date

Owner spent over 100 more than anyone once property was an STR, but if the contractor hours also count then they would not qualify?

The scenarios are hypothetical but made to help clarify the initial question with the a / b / c options.

If the desire is to also then use the