Check my math? Deducting STR losses against high wave W2 job.

[Gian Jr, III]

Hi BiggerPockets community, I am considering purchasing a STR and being an active participant for the opportunity to deduct the STR losses (notably deprecation) against my W2 job. I have been doing a lot of research here and I *think* I understand how this all works. If you have done this before, would you mind checking my math and seeing if I'm missing any large aspects?

I put together a spreadsheet example for a $1M STR purchase, $20k STR income a year, and $400k/yr W2 job in California. None of the expenses are exact but I am hoping to verify that my big picture idea (line 35) is correct and that I'm not missing any glaring issues. Many thanks in advance!

https://docs.google.com/spread...

[Darius Ogloza]

This quote below is from your link with bolded emphasis by me:

So, even if you materially participate in running your rental properties, you still can’t deduct those losses against other nonpassive income. That is, unless you meet one of the following exceptions:

• You can deduct up to $25,000 of losses from rental real estate activities (even though they’re passive) against earned income, interest, dividends, etc., if you “actively participate” in the activities (requiring less participation than “material participation”) and if your adjusted gross income doesn’t exceed specified levels.
• If you’re a qualified real estate professional, then your rental activities aren’t immediately considered passive. To be regarded as a real estate professional, you must perform a substantial amount of real estate business, defined as more than half of your time, and at least 750 hours, spent in real estate trades or businesses. 

In short, in the context of real estate, the majority of your time has to be spent in real estate activities (usually full-time workers in other professions fail at this level of the test because convincing the IRS that you work two full-time jobs presents a problem) and the time spent must exceed 750 hours.  

Again, a CPA can confirm this or tell you I am full of sh*t.