STR Depreciation/Bonus Depreciation Question

[Jonathan B.]

Hi all, we bought a STR in 2022 for 380k, renovated it for 200k in 2023, and rented it out in July, August, September of 2023 with an average stay of just under 6 days. We're changing our plan for the property in 2024 and plan to rent it out for two of the summer months on a <7 day basis, but then also use it for a month ourselves. Not looking to rent it out in the off-season currently. This will probably be the situation in 2024 and beyond. We are not real estate professionals.

1) How would you handle the classification of the property in the 2023 tax year and would you utilize a STR depreciation strategy?

2) How would you classify the property in the 2024 tax year and beyond?

Thanks!

[Michael Plaks]

@Jonathan B.

Assuming you pass the "material participation" test for 2023 and did not use the property yourself (or used very little), you should be able to treat it as an STR for 2023, including bonus depreciation. https://www.biggerpockets.com/forums/51/topics/1122635-the-s...

For 2024, it will be a mixed-use personal/vacation property on which no losses are allowed at all. Unless you revise your plan and ensure that your personal use is under 10% of the rental use. The rules are more complex than we can fully explain in an online forum.