On April 23, Meta confirmed it would lay off roughly 10% of its workforce, with separation notices following over the coming weeks and an effective date of May 20. The same day, Microsoft opened a voluntary “Rule of 70” exit window for approximately 8,750 U.S. employees — the first program of its kind in the company’s 51-year history, with notifications going out May 7 and a 30-day decision window.
Amazon has continued rolling reductions across AWS and retail, and the broader pattern of mid-2026 tech consolidation is now well established.
Severance packages at the larger end of these programs follow a familiar formula. Meta has historically offered sixteen weeks of base pay plus two additional weeks per year of service. Microsoft has long paid roughly two months of base pay plus tenure-based weeks.
Amazon’s structured approach typically runs eight to twenty weeks scaled by tenure, with a floor at the lower bound. Add accrued PTO, accelerated RSU vesting, and a prorated bonus, and the total package for a senior IC or manager often clears six figures of taxable income — paid as W-2 wages.
If you are one of these workers, you are about to receive a single very large W-2 paycheck and four to nine months of unstructured time. That combination is the textbook setup for one of the most consequential tax-planning windows the U.S. tax code currently offers a high-income individual: the short-term rental tax loophole, made dramatically more powerful by the return of permanent 100% bonus depreciation on property acquired after January 19, 2025.
This piece is a deep dive on how to use it — and on the traps that most often kill the strategy.
Why this moment is rare for tech employees
Most articles about the STR loophole are written for physicians, dentists, and tech employees who are still working their primary job. That framing under-states the central friction that prevents most W-2 earners from successfully claiming the deduction: time.
The IRS does not let you offset W-2 income with rental losses unless your STR is treated as non-passive. Two tests must be cleared in the same tax year. First, the property’s average guest stay must be seven days or fewer (or you must meet one of the related short-term exceptions).
Second, you must “materially participate” in the activity. The threshold most W-2 earners aim for is the 100-hour test combined with logging more hours than anyone else — including cleaners, co-hosts, and any manager or assistant.
When you are employed full-time, finding 100 hours after work and weekends — and ensuring no one else logs more — is a real schedule problem. Many investors fail this test silently and only discover the problem during an audit or a CPA review years later.
A laid-off Meta engineer with sixteen weeks of severance plus accrued PTO is in a different category entirely. They can close on a property in late spring or summer, personally manage the furnishing and listing process, log 100+ hours easily, document everything in real time, and place the property in service before December 31, 2026 — which is what unlocks the depreciation in the same tax year as the severance income.
The window closes when you take the next job. That fact governs the entire playbook below.
The tax math, made concrete
Consider a Meta L5 software engineer with $250,000 base, $80,000 bonus, and $160,000 of vesting RSUs (gross), plus a sixteen-week severance equal to roughly $77,000. Their 2026 W-2 income lands somewhere between $400,000 and $570,000 depending on RSU vesting timing.
At a federal marginal rate of 35–37% — plus state, plus FICA on wages — the tax bill on that income is meaningful. Take a $400,000 figure for simplicity: a fully employed-then-laid-off engineer in California is looking at a combined federal-plus-California liability in the rough neighborhood of $130,000–$150,000 before any planning.
Now layer in an STR purchase. Take a $600,000 cabin: $100,000 of land (non-depreciable) and $500,000 of building. A reputable cost segregation study on a property like this typically reclassifies somewhere in the range of 20–30% of the depreciable basis — about $100,000–$150,000 — into 5-year, 7-year, and 15-year property categories. Under the One Big Beautiful Bill Act, qualifying property acquired and placed in service after January 19, 2025 is eligible for 100% bonus depreciation, now permanent.
That means the entire $100,000–$150,000 of accelerated property is written off in year one. Add roughly $9,000 of regular depreciation on the remaining building basis, and you have $110,000–$160,000 of paper losses in year one — net of whatever rental income you generated.
If you have cleared the material participation test, those losses are non-passive. They flow through to your 1040 and reduce taxable income. On a $400,000 AGI, a $130,000 paper loss produces roughly $45,000–$50,000 of federal tax savings alone, and California adds further savings (with the important caveat that California decouples from federal bonus depreciation, so the state benefit is materially smaller than the federal).
The savings, in other words, frequently amount to 20–40% of the down payment on the cabin itself. For a fuller walkthrough of the underlying mechanics, see our guide to the STR loophole and 100% bonus depreciation and the bonus depreciation tax timeline.
The 90-day playbook
Severance is finite. The IRS does not extend deadlines because you needed more research time. A useful frame: Days 1–30 are about decisions and pre-approval; Days 31–60 are about closing; Days 61–90 are about placing in service and logging hours.
Days 1–30: clarity and candidates
Talk to an STR-specialist CPA before you do anything else. This is the single most important call in the whole sequence. They will confirm your projected tax position, model the deduction under your specific facts, and tell you whether the strategy actually pencils for you given your state, entity choices, and other 2026 income events.
Pull your severance agreement and confirm payment timing. If your separation pushes major income into 2027 instead of 2026, the entire calculus shifts and you may want to delay the purchase to align years.
Pick two or three target markets using the criteria below. Then get pre-approved with an STR-friendly lender. DSCR loans typically qualify based on the property’s projected cash flow rather than your now-disrupted W-2 history, which is critical when you no longer have a paystub.
Days 31–60: underwrite and close
Run real underwriting on candidate properties. Don’t assume “the average property” — model the specific home using market ADR and occupancy data, then back out conservative expenses. Chalet’s free Airbnb calculator takes any address and projects revenue, cap rate, cash-on-cash return, and DSCR loan qualification.
Factor in the all-in cost of furnishing. A turnkey 4-bedroom cabin can run $30,000–$60,000 in furniture, hot tub, linens, supplies, and small fixes before your first guest arrives. This is not optional spend if you want to compete in a saturated market.
Work with an STR-experienced agent in the market who has closed properties in the area, knows the permit path, and understands HOA rental restrictions. Chalet matches investors with vetted STR-specialist agents in 200+ markets. If a property is already operating as an STR, existing turnkey listings compress the timeline materially because the listing, the photos, and often the calendar transfer with the property.
Close as quickly as the lender and title company allow. Thirty to forty-five days is typical.
Days 61–90: place in service, log hours, clear the test
“Placed in service” means the property is genuinely available for rent. List it on the platforms. Accept bookings. The IRS cares about the date the property became available, not the date your first guest checked in.
Personally manage the first wave: respond to guest messages, coordinate cleanings, handle repairs, run check-ins. Track every hour in writing — calendar entries, time logs, photos, screenshots, and platform timestamps. The single most common audit failure is undocumented hours estimated months after the fact.
Self-clean if you live within driving distance. Cleanings that you perform are some of the highest-value hours you can log because they unambiguously belong to the property and they help ensure no cleaner logs more hours than you. Get the cost segregation study completed in time for tax filing. Reputable firms typically take four to eight weeks.
Markets that fit this profile
Three principles guide market selection for a tax-strategy purchase under a tight time budget.
First, drive-to from a major tech hub. You will need to be on-site repeatedly. A Meta engineer in the Bay Area should not buy in the Smoky Mountains for a tax-strategy purchase unless they’re prepared for repeated cross-country trips during the very window when they need to be in the property logging hours.
Second, ADR-driven yield over occupancy-grind markets. When time is short and you’re paying a CPA, attorney, agent, and cost-seg firm, you want fewer turnover events and more revenue per booking. Cabin and luxury-leisure markets tend to fit this profile better than urban arbitrage markets.
Third, regulation clarity. You don’t have time to navigate ambiguous permit paths. Markets with established STR ordinances and predictable enforcement are worth a yield discount.
The table below is drawn from Chalet’s own analytics. Numbers reflect 12-month trailing averages and represent typical, not top-decile, performance. The “fit” column is based on what we see investors in this profile actually choose.
| Market | Typical ADR | Occupancy | Avg Annual Revenue | Median Home Price | Gross Yield | Best fit for |
|---|---|---|---|---|---|---|
| Sevierville, TN | $222 | 66% | ~$52,000 | ~$450K | 11–16% | Texas/Southeast hubs; remote-friendly |
| Broken Bow, OK | $315 | 42% | ~$55,000 | ~$333–400K | 15–21% | Austin, Dallas, Houston |
| Coachella, CA | $462 | 51% | ~$74,000 | ~$413K | ~15% | Bay Area, LA |
| Joshua Tree, CA | varies | varies | varies | varies | varies | Bay Area, LA, Seattle (fly-and-drive) |
| Big Bear Lake, CA | varies | varies | varies | varies | varies | Bay Area, LA |
| Santa Fe, NM | $208 | 70% | ~$54,000 | ~$566K | ~8% | Lower-yield, higher-stability play |
| Pigeon Forge, TN | premium ADR | seasonal | premium | varies | strong | Repeat-buyer markets |
For a Meta or Google engineer in the Bay Area, Coachella and Joshua Tree are within a four-to-seven-hour drive and give you both market-beating ADR and the ability to be on-site frequently during the 90-day window. South Lake Tahoe is closer geographically but layered with seasonal complexity worth understanding before committing — peak demand is concentrated in winter and summer with deep shoulder dips.
For Microsoft and Amazon employees in Seattle, Big Bear Lake and Joshua Tree are flight-driving distance; Coeur d’Alene and Sandpoint, ID are easier drives if you’re willing to underwrite a less-saturated market.
For Texas hub employees in Austin, Dallas, or Houston, Broken Bow, OK is roughly a four-hour drive from Dallas and offers some of the highest gross yields in the country, with ADR-driven economics that suit hands-on owners.
For investors willing to fly, Sevierville and Pigeon Forge in the Smoky Mountains foothills remain among the most consistent cabin-rental markets in the U.S., with year-round demand from drive-to East Coast and Midwest tourists. For more on cabin-market economics specifically, see Chalet’s analysis of the highest-yield mountain towns.
Before committing to a market, review the local rental rules. Chalet maintains rental regulation summaries for the major STR markets, which you should pair with a call to the city or county zoning office.
The five traps that kill the strategy
Even seasoned investors fail this strategy in predictable ways. Five traps account for the majority of failures.
Don’t hire a full-service property manager in year one. If a manager logs more hours than you, you fail material participation. Use cleaners and co-hosts in narrow capacities, but you must be the operator of record. After year one, when the bonus depreciation has been claimed, you can transition to passive operation if you choose — but the first year is yours to run.
Don’t assume California behaves like the federal government. California decouples from federal bonus depreciation. That doesn’t kill the strategy — federal savings are usually the bulk of the benefit — but you need to model your state taxes separately. Other states with non-conforming rules deserve the same caution.
Don’t buy a deal that only pencils with the tax savings. The post-tax IRR can be impressive, but if the property doesn’t carry itself before taxes, you have a leaky boat with a single life vest. Cash-on-cash return at conservative assumptions should be your first filter, not your last.
Don’t ignore depreciation recapture. When you sell, the IRS recaptures depreciation taken at up to 25%. A 1031 exchange into another investment property defers recapture; holding through death and stepping up basis at the estate level eliminates it; converting to a primary residence has its own rules. A two-year flip does not solve recapture.
Don’t claim more hours than you can defend. The IRS pattern with STR audits is to ask for your time log and demand contemporaneous evidence — calendar entries, text messages with cleaners, vendor invoices, listing platform timestamps, photos. Estimating “I probably worked on this five hours that week” months after the fact is not evidence. Build the documentation habit on Day 1.
One last calibration
This strategy is not for everyone receiving a severance check.
If your severance pushes 2026 income below the high-bracket thresholds — say, you’re a level-3 IC with limited tenure — the deduction’s value shrinks because the marginal rate against which you’re saving is lower. If you have other ways to offset 2026 income (a stock loss harvest, a Roth conversion in a low year, a charitable deduction stack), the STR play may not be the highest-EV move.
But for a senior IC, manager, or director at one of these companies, with a sizable severance package and a clean runway through year-end, the math is rarely closer to the surface. The 100% bonus depreciation window is now permanent for property acquired after January 19, 2025 — which means the urgency isn’t about a phase-out. It’s about your specific tax year and the simple reality that the same purchase made in February 2027, after you’ve taken a new job, becomes operationally far harder to qualify for under material participation.
The opportunity cost of getting this wrong is meaningful. The opportunity cost of missing it entirely, when you had both the income to offset and the time to clear the test, is bigger.
A separation isn’t a strategy. The next 90 days, used well, can be.
The thesis: a tech severance package and a window of unemployment, used together, are the rare combination that turns the STR tax loophole from a footnote in a CPA’s deck into a real line item on your balance sheet — but only if you act inside the year you’re laid off, with a property you would own anyway, and with hours you can actually defend.
Take the next step
- Run the numbers on a specific property: Use the free Airbnb investment calculator to project revenue, cap rate, cash-on-cash, and DSCR loan qualification for any address.
- Get a second opinion on a market: Browse Chalet’s market dashboards for ADR, occupancy, revenue, and yield trends across 200+ U.S. markets.
- Get matched with an STR-specialist agent or lender: Chalet’s vetted agent and lender network is national and STR-focused.
Disclosures
Chalet is not a law firm, CPA firm, or investment adviser. Nothing on this page creates a CPA-client, attorney-client, or fiduciary relationship. Tax laws change, and state rules may differ from federal rules — California, in particular, decouples from federal bonus depreciation. Always consult your own qualified tax and legal professionals about your specific situation. References to “Airbnb” are used colloquially to describe short-term rentals broadly; Chalet is not affiliated with Airbnb, Inc.
