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Updated 3 months ago,

User Stats

51
Posts
22
Votes
Berry Starnes
Pro Member
22
Votes |
51
Posts

short term rental loophole question about existing rentals when purchasing

Berry Starnes
Pro Member
Posted

Question: If you were to purchase a STR to close in November and the seller negotiated that the buyer must honor existing rentals with the current rental company/property management until January of 2025….

1- does this negate the short-term rental loophole for the 2024 if you aren’t managing it yourself for these months in 2024? I believe you just need to have it rented for 1 week in the year to use the bonus depreciation after the cost seg, correct? Does it matter that a property management company is doing this for the first few months? 

2-if you started to self-manage in January 2025 and managed for the remainder of the year would you not satisfy the 100 hr rule and participate more than any others? The bonus depreciation goes down to 40% next year, so I want to make sure I would still qualify for the 60% bonus depreciation by purchasing the property in 2024, renting it out, but then taking over the managing of it for the remainder of the life of it.  

Should I just negotiate to only honor the existing rentals until Mid December of 2024 and rent it out for the last few weeks myself?

Thanks!

  • Berry Starnes
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