STR Permit Requirement

[Kevin G.]

Hello BP-

I purchased a home in Truckee, CA with the Intention to Rent out the property on an STR basis. The town requires an STR permit before renting and they limit the number of STR Registration Certificates to 1,225 a year. So, there is a waitlist process.

There is also a 365-Day waiting period after a home sale before the new owner may apply for the waitlist. Even if the purchase date was prior to the regulation going into effect the waiting period would still apply.

To my questions (moving out of California is not an option :-))

1. Can the operating cost tied to carrying the property for the first year be used in any way to offset income? 

2. Once the permit is received, I know at that point I would be eligible for the SRT loophole, but can I depreciate my home based on the Purchase Price plus any upgrades (new floors, bath remodels, adding recessed lighting, etc)?

3. Any suggestions or things to consider?

Thank you in advance.