27.5 or 39? PAL limitation of $25k or not?

[Michael Meegan]

In 2022....

I renovated 23% of the square footage of my primary residence (addition on the house that has a private entrance) and launched that space as an STR.

The average daily use was/is less than 7 days.

I kept/have accurate time logs for me and all other individuals during the renovation and after the launch. I participated more than 100 hours and more than any other individual.

I did not use or make of use of the space for personal use.

It operated/operates as a STR using the AirBNB platform.

My expenses were $28,000 for the renovation, furnishings and all other costs associated with launching and operating the STR.

My revenue from the STR was $1,500.

I earned $109,000 of non-passive income at my W2.

1. Do I depreciate over 27.5 or 39?

2. Am I limited to the Passive Activity Loss Limitation of $25K and the phase out, or do I have an exception whereas I can take all of my STR loss towards my non-passive W2 income?