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57 days to be under contract

Cut this year's tax bill with one Airbnb rental.

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100% bonus depreciation is permanent again. Place a short-term rental in service by December 31 and write off the furniture, appliances, and site improvements in full — against your 2026 income.

$104,000
Year-1 deduction
$36,400
Federal tax cut at 35%

Illustrative: a $650,000 purchase, 20% land, short-life assets at 20% of basis, 35% federal bracket.

Working backwards from December 31

Four dates decide whether this counts on your 2026 return.

57

days left to be under contract

  1. Gate 1 · Now

    Oct 26

    Be under contract

    Search, tour, and get an offer accepted. This takes three to six weeks in most markets.

    You are here

  2. Gate 2

    Dec 10

    Close

    Escrow, appraisal, and financing run 30 to 45 days. DSCR loans sit at the longer end.

    Escrow

  3. Gate 3

    Dec 24

    Furnish and photograph

    Beds, sofas, appliances, and decor. Two to three weeks if the orders are placed at contract.

    Setup

  4. Gate 4

    Dec 31

    Place in service

    The listing is live and available to book. You do not need a booking — ready and available counts.

    Deadline

A good realtor runs these dates backwards from day one — that is the whole reason to use one on this timeline. Escrow length varies by market, seller, and loan type, and a DSCR loan can add a week or two. Treat October 26 as the last safe date, not the target.

Where deals actually fail

The tax rule is settled. The property is the bottleneck.

Every buyer on this timeline hits the same three walls, and thorough market analysis only clears the first one. A realtor who sells primary homes will hit all three with you.

The property has to be legal to rent

Permit caps, HOA bans, and licence backlogs kill deals late. Our realtors check the rules before you write the offer, not after inspection.

The offer has to win on speed

You are competing on a clock. Realtors who close short-term rental deals every month know which sellers move fast and how to structure the contingencies.

The furnishing starts before closing

If you order furniture the week you close, you miss December 31. Our realtors line up the setup during escrow.

Rough sizing

What a purchase this size could deduct in Year 1.

Bonus depreciation applies to short-life assets, not the building. The estimate below assumes those assets are 20% to 30% of the building basis, which is the common range for a furnished rental.

$
%

Illustrative only, and not tax advice. Your actual deduction depends on the property, a cost segregation study, your material participation in the rental, and your CPA's analysis.

Estimated Year-1 deduction

$80,000 – $120,000

Estimated federal tax reduction: $28,000 – $42,000

For current landlords

Selling a long-term rental? The clock is the same.

A 1031 exchange defers the gain and resets the depreciation clock on the new property. Pair that with bonus depreciation and the Year-1 deduction lands on a fresh basis. The identification and closing deadlines sit inside the same window as December 31.

Annual cash yield

Long-term rental

Often mid single digits

Airbnb rental in 2026

Higher potential through nightly pricing

2–3× higher potential
Year-1 deductions

Long-term rental

Straight-line only

Airbnb rental in 2026

Bonus depreciation on short-life assets

100% bonus depreciation
Depreciation clock

Long-term rental

Mid-stream

Airbnb rental in 2026

Resets on the new purchase

Fresh basis
Loss treatment

Long-term rental

Usually passive

Airbnb rental in 2026

Possible non-passive treatment with material participation — confirm with your CPA

More flexibility
Buyer demand at exit

Long-term rental

Investor buyers only

Airbnb rental in 2026

Investor and lifestyle buyers in vacation markets

Two buyer pools
Browse 1031-ready Airbnb rentals

Scope

What actually gets the 100% deduction.

Furniture and fixtures

Beds, sofas, tables, lighting, decor.

Appliances

Refrigerators, washers, dryers, ranges.

Site improvements

Landscaping, driveways, fencing, decking.

Electronics and equipment

Televisions, smart locks, tools, outdoor gear.

Not the house. The building itself is 27.5-year property and depreciates on the normal schedule. Only the short-life assets above take the 100% first-year deduction.

Bonus depreciation resources

Stay informed with the latest insights, strategies, and expert guidance on bonus depreciation for short-term rental properties.

Airbnb Cost Segregation

Airbnb Cost Segregation

When It Makes Sense (2026)

March 4, 2026
Bonus Depreciation

Bonus Depreciation

STR Loophole Tax Timeline (2026)

February 17, 2026
How to Choose the Right Cost Segregation Methodology for Real Estate Investors

How to Choose the Right Cost Segregation Methodology for Real Estate Investors

October 20, 2025
View all bonus depreciation posts

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Frequently asked questions

December 31, 2026 is the date the property must be placed in service. October 26 is the last date you can realistically be under contract and still reach it — escrow takes 30 to 45 days and furnishing takes two to three weeks. Work backwards and October 26 becomes the real decision date.

No. "Ready and available for rent" counts as placed in service. A live listing with photos and furnishings is enough, even with no booking yet.

No. Buildings are 27.5-year property. Bonus depreciation applies to short-life assets like furniture, appliances, and certain site improvements — not the structure.

An engineering-based cost segregation study identifies and values them. Your CPA arranges this after closing, in time for your return. Chalet does not perform or arrange these studies.

It may, if the average guest stay is seven days or fewer and you meet the material participation tests. This is the part people get wrong most often. Your CPA must confirm it for your situation before you rely on it.

Some states decouple, including California. You may need to keep separate federal and state depreciation schedules. The federal benefit still applies — ask your CPA about your state.

Nothing. You pay the realtor nothing extra, and you pay Chalet nothing. Chalet receives a referral fee from the realtor's commission if you close.

Bonus depreciation is permanent now, so the deduction is still available in 2027. What you lose is the ability to apply it against your 2026 income. If that is the reason you are buying, the date matters.

Many landlords are selling appreciated long-term rentals and using a 1031 exchange to defer capital gains into an Airbnb rental. That move avoids an immediate tax hit and resets the depreciation clock. With a fresh basis, a cost segregation study paired with 100% bonus depreciation accelerates large Year-1 deductions. The "tax stack":

  • Defer gains with the 1031 exchange.
  • Reset and accelerate depreciation with bonus depreciation.
  • Boost cash flow through nightly pricing versus traditional monthly rents.

General information only, not tax advice. Always confirm details with your CPA.

Have questions about anything else? Visit our FAQ page →

57 days left

Start the search now, or start it next year.

We match you with a realtor who sells short-term rentals in your market and understands the December 31 placed-in-service deadline. The introduction is free and there is no obligation.

Select your STR markets

Add states, counties, or cities you want to invest in.

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