"Purchase STR End of Year - Bonus Depreciation - Pivot to MTR" Questions

[Shawn Regnier]

Hello Everyone,

I recently heard a guest on Brandon Turner's newest podcast discuss their STR strategy when working with Doctors. The gist is that their clients (primarily doctors) purchase homes at the end of the year, turn them into short-term rentals, and switch them to mid-term rentals at the turn of the new year. This allows them to bypass the REP status since they are full-time doctors and cannot meet the standard. Then their clients do a cost segregation study because they benefit from being high-income earners. Yes, I know bonus depreciation is 60% for 2024.

My questions:

1) Does this sound valid, or are there many more complicated steps for this to work?

2) What would happen if someone used the above steps, and instead of transitioning to an MTR, they got out of the rental gamer and turned their property into a vacation home? Would they still be able to cost seg the property because it was an STR for a few weeks in December?

Sorry for my cluelessness on this topic. I've read many other posts, but none fully answered my questions.