Could Trump shock Short Term Rental markets with Tax Loop Hole for AirBnB Investors?

[AJ Wong]

President Trump’s nominee for Treasury Secretary, Scott Bessent, testified that extending the ‘Tax Cuts and Jobs Act’ of 2017 is essential to avoiding economic catastrophe.

Part of those cuts included the short-term rental tax loophole, a strategy real estate investors can use to help mitigate their rental income tax by offsetting earned income with real estate losses, and could be renewed or extended.  

There are several articles that do an exceptional job of explaining who, what, where, why and how tax payers qualify for the ‘STR Loophole' listed here:

The Short Term Rental Tax Loop Hole: A Game Changer for W-2 Wage Earners

The Short Term Tax Rental Loop Hole: What Investors need to know 

The implications on the Oregon and California Coastal STR market is a strengthening buyer pool for luxury rentals in the $750-1.5M+ range. The deduction is optimized as values increase and can potentially offset the entire net investment (including down payment) for high wage earners.

We've helped a handful of investors maximize their investments over the past several years and anticipate a robust demand if/when the tax cuts are re-instituted. 

As always, consult with your licensed tax professional for qualifying, tax implications and strategy.

What do you think will the accelerated depreciation be extended? 

[Collin Hays]

This isn’t/wasn’t a loophole - just tax policy.