All Forum Posts by: Anna Thanopoulou

Hi everyone,

I have a few questions around material participation for an STR:

1) Activities that count: does anyone have a list of things we know for sure count (eg based on court cases?) Do home improvement activities count? Does marketing count? Do activities prior to launch count or only operations?

2) Time spent by others: to qualify for the test "100 hours and nobody spent more time", how do we track the time spent by others and what proof would be required in the event of an audit?

3) Grouping properties: specifically, can we group activities across two properties we purchased and placed in service this year - one in the US and another one overseas. Same owners, same management (self managed), both STRs. Can we group our hours across them or does international not count?

Many thanks in advance

Hi everyone. 

We purchased a property in early October and are placing it in service this week (mid November).

We had intended to run a cost segregation study and try to accelerate depreciation which we can deduct against our W2 (assuming material participation).

However, we have been reading through the IRS guidelines (eg publication 946 on Property Depreciation) and there seems to be the concept of "short year" which would mean that we can only deduct ~1.5/12 of a year's worth of depreciation in 2024.

Is this correct or are there any different rules for STRs specifically? We have been swept by the influencers touting the benefits of cost seg, so we are wondering how come nobody ever mentioned that it might not fully appy during the first year in service.

Many thanks in advance