The Complete STR Tax Deduction Checklist for 2026

Short-term rental investors can deduct virtually every legitimate expense related to acquiring, operating, and maintaining their rental property. The key is knowing which deductions exist, documenting them properly, and understanding which require special treatment (like capitalization vs. immediate expensing). This checklist covers every major deduction category available to STR owners in 2026, including changes from recent legislation.

If you use the STR loophole, meaning your average guest stay is 7 days or fewer and you materially participate, these deductions create losses that can offset your W-2 and active business income. If your STR doesn't qualify for the loophole, the deductions still reduce your rental income but losses may be classified as passive. See our guide to using STR losses against W-2 income for the full breakdown.

Depreciation Deductions

Standard Depreciation

The residential rental building (excluding land) depreciates over 27.5 years using the straight-line method. This is your baseline depreciation deduction and applies whether or not you use cost segregation.

For a property purchased at $450,000 with $100,000 allocated to land, the depreciable basis is $350,000. Annual depreciation: $350,000 / 27.5 = $12,727.

Cost Segregation + Bonus Depreciation

A cost segregation study reclassifies building components into shorter recovery periods. Typical reclassification: 20-30% of the depreciable basis moves from 27.5-year property to 5-year, 7-year, or 15-year categories.

With 100% bonus depreciation restored by the Big Beautiful Bill, these reclassified assets are fully deductible in year one. On the same $350,000 depreciable basis with 25% reclassified, the year-one bonus depreciation is $87,500. Read our Cost Segregation + STR Loophole guide and our bonus depreciation update for details.

Furniture, Fixtures, and Equipment (FF&E)

Items purchased separately from the building (beds, sofas, dining tables, TVs, kitchen appliances, linens, towels, decor) are depreciable over 5 or 7 years depending on the asset class. With 100% bonus depreciation, these can be fully deducted in the year placed in service. Maintain purchase receipts for every item.

Operating Expense Deductions

Property Management and Co-Host Fees

Fees paid to property managers, co-hosts, or virtual assistants for managing your STR are fully deductible. This includes percentage-based fees (typically 10-25% of revenue) and flat monthly fees. Deduct on Schedule E, Line 18 (Other expenses) or Line 11 (Management fees).

Platform Fees

Airbnb, VRBO, Booking.com, and other platforms charge host service fees (typically 3-5% of booking revenue). These are deductible as a cost of doing business.

Cleaning and Turnover Costs

All turnover cleaning expenses, whether you hire a cleaning company, an independent contractor, or pay for cleaning supplies, are deductible. This includes between-guest deep cleans, laundry services, and consumable supplies (cleaning products, trash bags, toilet paper, paper towels).

Utilities

Electricity, gas, water, sewer, trash pickup, internet, and cable/streaming services are fully deductible for a property used exclusively as an STR. If you also use the property personally, you prorate the deduction based on the ratio of rental days to total use days.

Insurance

Property insurance, landlord insurance, short-term rental insurance, umbrella policies, and any rider coverage specific to your STR are all deductible. This includes premiums for platforms like Proper Insurance or CBIZ that specialize in STR coverage.

Property Taxes

Real estate property taxes are deductible on Schedule E as a rental expense. Note: this is separate from the $10,000 SALT deduction cap on your personal return. Taxes attributable to rental property are not subject to the SALT cap. They're a business expense.

Mortgage Interest

Interest on the mortgage for your STR property is deductible on Schedule E. This applies to acquisition debt and, in some cases, home equity debt used for the property. The personal residence mortgage interest limitations under IRC §163(h) do not apply to rental property debt.

HOA Fees and Condo Assessments

Monthly HOA dues and special assessments are deductible operating expenses for STR properties in managed communities.

Repair and Maintenance Deductions

Repairs (Immediately Deductible)

Repairs that maintain the property in its current condition are deductible in the year incurred. Examples: fixing a leaky faucet, patching drywall, replacing a broken window, repainting a room to its existing color, replacing a worn-out garbage disposal.

The IRS distinguishes repairs from improvements based on whether the work restores the property to its current state (repair) or makes it better, adapts it, or extends its useful life (improvement).

Capital Improvements (Must Be Depreciated)

Improvements that better the property, adapt it to a new use, or restore it from a state of disrepair must be capitalized and depreciated. Examples: a new roof, kitchen remodel, adding a bathroom, replacing the HVAC system, installing a pool.

Capital improvements to residential rental property depreciate over 27.5 years (or shorter periods if identified through cost segregation). With bonus depreciation at 100%, certain qualified improvement property may qualify for accelerated deductions.

Safe Harbor for Small Taxpayers

If your average annual gross receipts are $10 million or less and the total amount paid during the year for repairs, maintenance, and improvements on a single building doesn't exceed the lesser of $10,000 or 2% of the unadjusted basis, you can elect to deduct costs that might otherwise require capitalization. This is the de minimis safe harbor under Treas. Reg. §1.263(a)-1(f).

Travel and Transportation Deductions

Mileage or Actual Vehicle Expenses

Trips to your STR property for management, maintenance, inspections, and guest-related tasks are deductible. You can use the standard mileage rate (check the current IRS rate for 2026) or actual vehicle expenses (gas, insurance, depreciation, repairs) prorated for business use. Keep a mileage log with dates, destinations, purposes, and miles driven.

Airfare and Lodging for Property Visits

If you travel to a different city or state to manage your STR, airfare, hotel costs, and meals (50% deductible) are deductible as business travel expenses, provided the primary purpose of the trip is property management, not personal vacation. Document business activities conducted during each trip day.

Professional Service Deductions

CPA and Tax Preparation

Fees paid to a CPA or tax professional for preparing your rental tax return, advising on STR tax strategy, or handling correspondence with the IRS are deductible. Allocate between personal and rental if your CPA handles both.

Legal Fees

Attorney fees for lease drafting, entity structuring, regulatory compliance, or defending against tenant/guest disputes are deductible. Fees for property acquisition are capitalized into the property's cost basis instead.

Cost Segregation Study

The fee for a cost segregation study (typically around $1,500) is deductible as a business expense in the year the study is conducted.

Bookkeeping and Accounting Software

QuickBooks, Stessa, Baselane, or other accounting tools used for rental bookkeeping are deductible. This includes transaction fees charged by rental payment platforms.

Marketing and Guest Experience Deductions

Listing Photography and Videography

Professional photos, drone footage, virtual tours, and video walkthroughs of your STR are deductible marketing expenses.

Guest Amenities and Supplies

Welcome baskets, coffee, snacks, toiletries, guidebooks, board games, and other guest amenities are deductible. So are subscriptions to streaming services (Netflix, Disney+) provided for guest use.

Signage and Branding

If you brand your STR (custom signs, printed welcome materials, branded keyboxes), these costs are deductible.

Commonly Missed Deductions

• Home office deduction. If you manage your STR from a dedicated space in your primary residence, you may qualify for the home office deduction under IRC §280A(c). This is separate from the STR property itself. The simplified method allows a deduction of $5 per square foot (up to 300 sq ft, or $1,500 max).
• Phone and internet. The business-use percentage of your personal phone and internet bill is deductible if you use them for guest communication, pricing management, and property oversight.
• Education and training. Courses, conferences, and materials directly related to operating your existing STR business are deductible. General real estate investing courses taken before you acquire a property typically are not.
• Startup costs. If you incurred expenses before your STR was placed in service (market research, initial furnishing, pre-opening cleaning), up to $5,000 of startup costs can be deducted in year one under IRC §195, with the balance amortized over 180 months.
• Entity formation costs. Fees for forming an LLC or other entity for your STR (state filing fees, registered agent services, operating agreement drafting) are deductible or amortizable.

Deductions That Require Caution

• Personal use days. If you or family members use the STR property personally, expenses must be allocated between rental and personal use. If personal use exceeds the greater of 14 days or 10% of rental days, the property may be classified as a personal residence under IRC §280A, limiting your ability to claim losses.
• Mixed-use travel. Trips that combine STR management with personal vacation require careful allocation. Only the business portion is deductible, and the IRS scrutinizes travel deductions more closely than most other categories.
• Meals. Business meals (meeting with your CPA, property manager, or contractor about the STR) are 50% deductible. Meals during personal use of the property are not deductible.