Key takeaways
- 7-day average stay = non-passive (Schedule E).
- Material participation 100 hours.
- Cost seg + bonus depreciation huge.
- Occupancy tax must be remitted.
- Track guest stays carefully.
Core concepts
Non-passive treatment
Average stay < 7 days = active income offset.
Material participation
100 hours minimum.
Cost seg
Furnishings 5-year depreciation.
Step-by-step framework
- 1Log all guest stays.
- 2Track participation hours.
- 3Engage cost seg.
- 4Remit occupancy tax.
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Common mistakes to avoid
- Stays > 7 days = passive.
- Skipping participation log.
- Missing occupancy tax.
Frequently asked questions
Why 7-day threshold?
IRS classification trigger.
Material participation?
100 hours.
Cost seg benefit?
30–40% basis accelerated.
Occupancy tax rate?
6–18%.
Action checklist
- ☐Stays logged.
- ☐Hours tracked.
- ☐Cost seg engaged.
- ☐Occupancy tax remitted.
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