Question on Short Term Rental Loophole

[Duke Giordano]

Hi All,
Question, I am a high income W2 employee and considering purchasing a short term rental. I do not qualify for a real estate professional status, but recently heard about the short term rental loophole where one can write off losses against their W2 income if the meet certain criteria (7 day or less avg. stay, material participation, >100 hours participation etc.). I would then perform a cost segregation study year one to use that to offset against any rental/W2 income, or possibly any renovations of the STR. My main goal is to rent out as a STR for 1 year or as little as possible to qualify for STR loophole, and then take out of service for the following time after that and use only for personal use.

A few Questions:

1. If I purchase a short term rental, with the intention of maximizing only year 1 tax benefits do I have to have the STR in service for a FULL year from when it is placed in service, or can it be less than a calendar year? For example, say if I purchase in August of a certain year do I have to have in service until the following August, or just until Jan 1? Since my intention after 1-2 years of renting would be to take out of service and use solely for personal use, so trying to figure out how long/when I would have to leave in service to get Cost Seg/losses to offset W2 income benefit?

2. During that time it is in service, if it is mostly a seasonal rental do I have to rent it out or keep in service for the whole year, or only for the rental season which is typically 3-4 months? When they consider an average seven day stay how is that exactly calculated? Does that only count stays, or for the time the STR is on service on say AirBNB or VRBO etc?

I am trying to legally figure out how I can rent it out as little as possible and use it as much as possible I'll still qualifying for that cost segregation against W2? How long would I need to keep it in service as an STR to where I don't need to pay any of that back those losses (is it just year 1)?. Can I put on Airbnb for a high price and nobody rents it? What is the way that I can best utilize my renovation timeline in respect to closing as well as my cost segregation to where I can then write off 35% of the renovation cost.

Thanks so much in advance.