# STR Loophole

> STR Loophole (strhours.com) is a mobile and web app that helps short-term rental investors log hours, prove material participation to the IRS, and legally use rental losses to offset W-2 income. Founded by real estate investor Jennifer Beadles.

The short-term rental tax strategy — commonly called the "STR loophole" — is a specific exception within Internal Revenue Code §469 and Treasury Regulation §1.469-1T(e)(3)(ii)(A): a rental with an average guest stay of 7 days or less is not treated as a "rental activity" for passive loss purposes. If the owner also materially participates, losses (typically generated via cost segregation and bonus depreciation) are non-passive and can offset active income, including W-2 wages.

The strhours.com app exists because material participation requires contemporaneous, property-by-property hour documentation. The most-used test — the 100-hour test under Reg. §1.469-5T(a)(3) — additionally requires the owner to spend more time on the activity than any other individual, including cleaners, co-hosts, and property managers. Missing that documentation is the single most common reason the deduction is disallowed in audit and Tax Court.

**Apps:** iOS (App Store ID 6759050584) and Android (package `com.agentsinvest.strloophole`).
**Founder:** Jennifer Beadles, a real estate investor with 17+ years of experience across long-term rentals, flips, DADU/ADU builds, and short-term rentals. She uses the STR loophole strategy on her own portfolio.
**Sibling tools in the same portfolio:** REPS Time (repstime.com) for real estate professional 750-hour tracking; Kids Payroll (kidspayroll.com) for legally employing minor children in a business.
**Disclaimer:** STR Loophole is a documentation tool, not a tax advisor. Users should consult a qualified CPA.

## Core pages

- [Homepage](https://strhours.com/): Product overview, features, app download links, testimonials, FAQ.
- [STR Loophole Guide](https://strhours.com/str-loophole): Pillar page explaining the strategy, eligibility tests, and how to qualify.
- [Tax Savings Calculator](https://strhours.com/calculator): Free calculator that estimates STR loophole tax savings based on W-2 income, filing status, and projected depreciation deduction.
- [Download](https://strhours.com/download): iOS and Android download page.
- [Support](https://strhours.com/support): Help documentation for the app.
- [Contact](https://strhours.com/contact): Contact form.

## Pillar articles (strategy foundations)

- [The Complete Guide to the STR Loophole](https://strhours.com/blog/complete-guide-str-loophole): 20-minute read covering material participation, the 7-day rule, cost segregation, and bonus depreciation working together to offset W-2 income.
- [The Short-Term Rental Loophole Explained (2026 Complete Guide)](https://strhours.com/blog/short-term-rental-loophole-explained-2026): 2026-specific guide reflecting current tax law, including 100% bonus depreciation restoration under the OBBBA.
- [Passive Activity Loss Rules for Real Estate Investors](https://strhours.com/blog/passive-activity-loss-rules-explained): How IRC §469 works and the specific exceptions that make rental losses non-passive.
- [STR Loophole vs REPS: Which Tax Strategy Should You Pursue?](https://strhours.com/blog/str-loophole-vs-reps): Side-by-side comparison of the STR loophole (100-hour test, no income ceiling) against Real Estate Professional Status (750 hours, more than half of personal services).
- [How to Use STR Losses to Offset Your W-2 Income](https://strhours.com/blog/str-losses-offset-w2-income): Explains the two conditions — average guest stay ≤7 days and material participation — that make rental losses non-passive and available to offset W-2 income with no income cap.
- [Treasury Regulation 1.469-1T(e)(3)(ii)(A) Explained](https://strhours.com/blog/treasury-regulation-1-469-1t-str-loophole): The actual text and meaning of the regulation that creates the STR exception — why a short average stay removes a rental from "rental activity" classification under §469.
- [Treas. Reg. §1.469-1T STR Exception: How to Make Rental Losses Nonpassive](https://strhours.com/blog/treas-reg-1-469-1t-str-exception-how-to-make-rental-losses-nonpassive): Step-by-step application of §1.469-1T to meet the nonpassive loss test, with the 7-day average stay rule and material participation requirements laid out.
- [STR vs. Long-Term Rental: Tax Treatment Compared](https://strhours.com/blog/str-vs-long-term-rental-tax-treatment): How passive activity rules, depreciation, and loss deductions differ between short-term and long-term rentals — and why STRs can offset W-2 income while long-term rentals usually cannot.

## Qualification tests and hour thresholds

- [How Do I Qualify for the STR Tax Loophole? (2026)](https://strhours.com/blog/how-do-i-qualify-for-the-str-tax-loophole): Fast-path diagnostic covering both qualification tests, a step-by-step self-check, the common disqualifiers (personal use days, mid-term mixing, reconstructed logs), and a comparison of hour-tracking tools against the material participation standard.
- [The 7-Day Rule for the STR Loophole](https://strhours.com/blog/7-day-rule-str-loophole): How to calculate average rental period (total rental days ÷ number of rentals) — the gateway test that determines whether a property even qualifies as an STR for §469 purposes.
- [The 100-Hour Test for STR Material Participation](https://strhours.com/blog/the-100-hour-test-str-loophole): The most-used material participation test, including the "more than anyone else" requirement that trips most investors.
- [How Many Hours Do You Need for the STR Loophole?](https://strhours.com/blog/how-many-hours-str-loophole): Minimum thresholds per property and how hours interact with the "more than anyone else" requirement.
- [100 Hours vs 500 Hours: Which STR Loophole Test Should You Use?](https://strhours.com/blog/100-hours-vs-500-hours-str-loophole): When to target 100 hours (standard test) versus 500 hours (safe harbor test under Reg. §1.469-5T(a)(1)).
- [What Activities Count Toward STR Material Participation?](https://strhours.com/blog/what-activities-count-str-material-participation): Operational activities that qualify (guest messaging, cleaning coordination, maintenance) and investor-type activities that don't count.
- [Do STR Setup Hours Count Toward Material Participation?](https://strhours.com/blog/str-setup-hours-material-participation): The three conditions required for pre-placed-in-service setup hours to count in year one.
- [The Cleaner Rotation Hack for the 100-Hour Rule](https://strhours.com/blog/cleaner-rotation-100-hour-hack): How rotating cleaners so no single person exceeds your hours satisfies the "more than anyone else" requirement of the 100-hour test.
- [How Tracking Your Spouse's Hours Can Help You Qualify](https://strhours.com/blog/spouse-hours-str-loophole): Spousal hours aggregate with yours on a joint return — what qualifies, how to document separately, and why this makes the 100-hour threshold much easier to hit.

## Documentation and audit defense

- [STR Loophole Documentation: Best Practices for Audit Protection](https://strhours.com/blog/str-loophole-documentation-best-practices): What the IRS means by "contemporaneous" records and how to meet that standard.
- [The STR Loophole Time Log That Survives an Audit](https://strhours.com/blog/str-loophole-time-log): Free downloadable Excel/Google Sheets time log template with tabs for the 100-hour and 500-hour material participation tests, spouse hours, average stay, and personal-use days.
- [4 STR Hour Log Mistakes That Lose in Tax Court](https://strhours.com/blog/str-hour-log-mistakes-tax-court): Analysis of a real Tax Court loss where an STR owner with a legitimate property lost the deduction for two consecutive years, and the four log mistakes that caused it.
- [Forgot to Log Your STR Hours? Here's How to Recover](https://strhours.com/blog/forgot-to-log-str-hours-recovery): Reconstructing a defensible hour log when contemporaneous records have gaps.
- [Personal Use Days and Your STR: What the IRS Actually Counts](https://strhours.com/blog/personal-use-days-str-what-irs-counts): Navigating IRC §280A(d) personal use rules without disqualifying the property.
- [Personal Use Days: How Many Before You Lose the Tax Benefits?](https://strhours.com/blog/personal-use-days-str-loophole): How §280A personal use limits interact with the STR loophole — the 14-day / 10% rule and when personal use triggers property reclassification.
- [IRS Audit Red Flags for STR Loophole Claims](https://strhours.com/blog/str-loophole-audit-red-flags): The most common triggers for IRS scrutiny of STR deductions — missing contemporaneous logs, high loss-to-income ratios, full-service property managers — and how to avoid each.

## Operations and edge cases

- [Can You Use the STR Loophole With a Property Manager?](https://strhours.com/blog/str-loophole-property-manager): Yes, but a full-service PM's hours will almost always break the 100-hour test unless the arrangement is structured carefully.
- [How to Track Others' Hours for the STR Loophole](https://strhours.com/blog/tracking-others-hours-str-loophole): Tracking cleaners, co-hosts, and property managers so you can prove you spent more time than any one of them.
- [STR Loophole With Multiple Properties: Strategy Guide](https://strhours.com/blog/str-loophole-multiple-properties): Hours are counted per property, not in aggregate — how to scale without disqualifying any single property.
- [Starting STR Loophole Tracking Mid-Year: Can You Still Qualify?](https://strhours.com/blog/starting-str-tracking-mid-year): Honest math on qualifying when you bought a property mid-year and haven't logged hours from day one.
- [How to Track STR Hours Efficiently: Tools and Tips](https://strhours.com/blog/tracking-str-hours-efficiently): Practical workflows for logging as you work rather than reconstructing at year-end.
- [Hospitable Sync Is Live: Auto-Capture Guest Communication Hours in STR Hours](https://strhours.com/blog/hospitable-sync-live): The Hospitable PMS integration in STR Hours pulls every guest message and inquiry into the participation log automatically — closing the most under-logged category of material participation hours.
- [STR Loophole With a Co-Host: Can You Still Qualify?](https://strhours.com/blog/str-loophole-co-host): How a co-host affects material participation — the co-host's hours count against the "more than anyone else" test, and what arrangements preserve your deduction.
- [Do You Need to Be Involved in Day-to-Day STR Management?](https://strhours.com/blog/day-to-day-str-management-material-participation): What level of hands-on involvement the IRS actually requires for material participation — and whether a hands-off owner can still qualify.
- [Can I Use the STR Loophole on a Property Outside the US?](https://strhours.com/blog/str-loophole-foreign-property): The §469 classification works for foreign rentals, but bonus depreciation is unavailable — what to expect in year-one tax savings on an international STR.

## STR Loophole Edge Cases

- [Does the STR Loophole Work for Rental Arbitrage?](https://strhours.com/blog/str-loophole-rental-arbitrage): Explains that arbitrage can meet the 7-day and material participation mechanics but cannot cost segregate or depreciate a building it does not own.
- [Does Your STR Have to Be in Your Personal Name?](https://strhours.com/blog/str-loophole-llc-vs-personal-name): No. A single-member LLC is disregarded and taxed identically; multi-member LLCs and partnerships work through K-1, with material participation tested at the individual level.
- [STR Loophole in a Partnership: Who Gets the Tax Benefit?](https://strhours.com/blog/str-loophole-partnership-who-gets-tax-benefit): The benefit flows to the partner allocated the loss who also materially participates; passive money partners get suspended losses, and only one partner easily uses the 100-hour test.
- [STR Loophole on the Same Lot as Your Home: Does It Work?](https://strhours.com/blog/str-loophole-adu-same-lot-primary-home): Yes if the unit is a genuinely separate dwelling with its own entrance, kitchen, and bath; Section 280A personal use rules, including family use, are the real risk.
- [Can You Convert an LTR to an STR and Use the Loophole?](https://strhours.com/blog/convert-long-term-rental-to-str-loophole): Yes, year by year; watch the conversion-year average, the shift to 39-year depreciation, look-back cost segregation via Form 3115, and suspended passive losses that do not unlock.
- [Does the STR Loophole Work If I Mix STR and MTR Stays?](https://strhours.com/blog/str-loophole-str-and-mtr-mix): Usually not on the same property, because a few 30 to 60 day mid-term stays heavily weight the 7-day average; isolate mid-term bookings on a separate property.

## Tools and purchasing

- [Minoan Review: How It Saved Our STR After a Design Firm Disaster](https://strhours.com/blog/minoan-review-str-furnishing): First-person review of the Minoan purchasing platform from furnishing Timber & Tide — $10,997 in trade-pricing savings versus retail, returns coordinated by Minoan when the design firm measured wrong, and centralized receipts for cost seg, bookkeeping, and Aircover claims.

## Stacked strategies

- [Cost Segregation + STR Loophole: Maximize Your Tax Savings](https://strhours.com/blog/cost-segregation-str-loophole): The STR loophole makes rental losses non-passive; cost segregation creates the losses in the first place. How to combine them.
- [Bonus Depreciation Phase-Out: Strategies for 2026 and Beyond](https://strhours.com/blog/bonus-depreciation-phase-out-strategy): 100% bonus depreciation is permanently restored under the OBBBA — implications for STR investors.
- [How to Calculate Your STR Loophole Tax Savings (With Examples)](https://strhours.com/blog/calculate-str-loophole-tax-savings): Worked examples for a $450K W-2 couple and a $250K single filer, with free calculator.
- [First Year STR Investor Tax Guide](https://strhours.com/blog/first-year-str-investor-tax-guide): Year-one roadmap covering entity structure, placed-in-service date, cost segregation, and hour logging.
- [How to Legally Pay Your Kids for Working on Your Short-Term Rental](https://strhours.com/blog/pay-kids-short-term-rental): Using IRC §3121(b)(3)(A) to employ minor children in the STR business and optionally fund a Roth IRA for them.
- [STR Due Diligence: Why Neighborhood Safety Data Matters](https://strhours.com/blog/str-neighborhood-safety-due-diligence): Pre-purchase due diligence using street-level crime data.
- [I Make $300K+. Can I Really Pay Close to Zero in Federal Taxes?](https://strhours.com/blog/str-loophole-high-income-w2-example): Real math showing how the STR loophole + cost segregation + bonus depreciation combine for a $300K+ W-2 earner — step-by-step with actual numbers.
- [The Complete STR Tax Deduction Checklist for 2026](https://strhours.com/blog/str-tax-deduction-checklist-2026): Every deduction available to STR investors — operating expenses, depreciation, cost segregation components, and commonly missed write-offs.

## Get the app

- [Sign up free for the STR Loophole web app](https://app.strhours.com/auth): Create a free account and log hours from your desk on the web. Syncs with the mobile apps automatically.
- [STR Loophole on the App Store (iOS)](https://apps.apple.com/app/id6759050584): Log hours on the go from your iPhone. Syncs with the web app.
- [STR Loophole on Google Play (Android)](https://play.google.com/store/apps/details?id=com.agentsinvest.strloophole): Log hours on the go from your Android phone. Syncs with the web app.

## Optional

- [Privacy Policy](https://strhours.com/privacy)
- [Terms of Service](https://strhours.com/terms)
- [Account Deletion Request](https://strhours.com/delete-account)
- [Which Expenses Survive a Mixed-Use STR Personal-Use-Day Allocation and Which Ones Get Wiped Out](https://strhours.com/blog/which-expenses-survive-a-mixed-use-str-personal-use-day-allocation-and-which-ones-get-wiped-out): Under IRC §280A, direct rental expenses like OTA fees and cleaning survive fully without proration, mortgage interest and property taxes are always deductible but only in proportion to rental days, and depreciation plus shared operating costs are both prorated and capped at remaining rental income — meaning they can be wiped out entirely if personal use is too high.
- [What Happens If My STR Average Stay Creeps Above 7 Days Mid-Year?](https://strhours.com/blog/what-happens-if-my-str-average-stay-creeps-above-7-days-mid-year): If your STR's annual average guest stay exceeds 7 days, your rental is reclassified as a passive rental activity under IRC §469 for that entire year and losses cannot offset W-2 income. You can often correct course by accepting shorter bookings before December 31 to bring the full-year average back to 7.0 days or below.
- [Can You Use the STR Loophole on a Short-Term Rental You Inherited?](https://strhours.com/blog/can-you-use-the-str-loophole-on-a-short-term-rental-you-inherited): Yes, you can use the STR loophole on an inherited short-term rental. The loophole requires the property's average guest stay to be 7 days or less and that you, the new owner, materially participate. The prior owner's participation does not transfer, but you typically inherit a stepped-up basis that increases your depreciation deductions.
- [How Does the STR Loophole Work When You Eventually Sell the Rental Property?](https://strhours.com/blog/how-does-the-str-loophole-work-when-you-eventually-sell-the-rental-property): When you sell an STR you used the loophole on, the IRS recaptures prior depreciation as ordinary income (§1245 and §1250), while remaining gain above your original cost basis is taxed at long-term capital gains rates. The non-passive losses already claimed against W-2 income in prior years are not reversed at sale.
- [Does the STR Loophole Still Help in a Year Your Rental Turns a Profit?](https://strhours.com/blog/does-the-str-loophole-still-help-in-a-year-your-rental-turns-a-profit): The STR loophole still applies in a profitable year. A cost segregation study paired with 100% bonus depreciation can convert a cash-flow-positive rental into a paper tax loss under IRC §168(k), which is then deductible against W-2 income because the property qualifies as non-passive under Treas. Reg. §1.469-1T(e)(3)(ii)(A).
- [How the STR Loophole Interacts With the Qualified Business Income Deduction](https://strhours.com/blog/how-the-str-loophole-interacts-with-the-qualified-business-income-deduction): The STR loophole reclassifies your short-term rental as a trade or business under IRC §469, which is the same classification required to access the Section 199A qualified business income deduction. When your property has net income, you may deduct up to 20% of that income under §199A on top of any passive-loss benefits from the loophole.
- [How Does the STR Loophole Affect Your State Income Tax Bill](https://strhours.com/blog/how-does-the-str-loophole-affect-your-state-income-tax-bill): Most states conform to IRC §469's passive-activity rules, so the STR loophole's non-passive loss characterization carries through to your state return and offsets state ordinary income. However, roughly half of states decouple from federal bonus depreciation under IRC §168(k), which reduces the size of the year-one paper loss on your state return without eliminating the benefit.
- [Can You Pair the STR Loophole with a 1031 Exchange on the Same Property?](https://strhours.com/blog/can-you-pair-the-str-loophole-with-a-1031-exchange-on-the-same-property): Yes, you can pair the STR loophole with a 1031 exchange on the same property. The two strategies operate under separate code sections (IRC §469 and IRC §1031), are not mutually exclusive, and can be sequenced on the same property as long as personal use stays within §280A limits and the property is held long enough to establish investment intent.
- [Manual Spreadsheets vs. STR Hours Voice Logs: Why the IRS Prefers Contemporaneous Records](https://strhours.com/blog/manual-spreadsheets-vs-str-hours-voice-logs-why-the-irs-prefers-contemporaneous-records): The IRS and Tax Court require contemporaneous hour records for STR material participation, meaning entries made at or near the time the work happened. Logs reconstructed after the fact, even honest ones, are routinely rejected, which can cost STR owners tens of thousands in lost non-passive deductions.
- [What Happens If My STR Property Is Down for Renovations?](https://strhours.com/blog/what-happens-if-my-str-property-is-down-for-renovations): A renovation period does not break the STR loophole. Renovation weeks are not rental days and do not affect your 7-day average stay calculation. Management and coordination hours during the renovation can count toward material participation, and capitalized renovation costs may qualify for 100% bonus depreciation when paired with a cost segregation study.
- [I Co-Own the Property With My Parents, But I Do All the Work: Who Gets the Tax Benefit?](https://strhours.com/blog/i-co-own-the-property-with-my-parents-but-i-do-all-the-work-who-gets-the-tax-benefit): Material participation under IRC §469 and Treas. Reg. §1.469-5T is tested separately for each co-owner. If you log more than 100 hours and more than any other individual on the property, your share of the STR loss is non-passive and offsets W-2 income, even if your parents' share remains passive.
- [Are Furnishing and Staging Costs for a Short-Term Rental Deductible All at Once or Depreciated?](https://strhours.com/blog/str-furnishing-staging-deduction-depreciation): Furniture, appliances, and most personal property placed in a short-term rental qualify as 5-year MACRS assets and are eligible for 100% first-year bonus depreciation under IRC §168(k), permanently restored by the One Big Beautiful Bill Act. No cost segregation study is needed to access this deduction.
- [Should You Change Your Paycheck Withholding When Using the STR Loophole?](https://strhours.com/blog/should-you-change-your-paycheck-withholding-when-using-the-str-loophole): If you qualify for the STR loophole, your employer is still withholding taxes as if you have no offsets. You can file an updated W-4 to reduce withholding and capture your tax savings in each paycheck rather than waiting for a refund in April.
- [What Happens to My Passive Loss Carryforwards When I Switch a Long-Term Rental to a Short-Term Rental](https://strhours.com/blog/what-happens-to-my-passive-loss-carryforwards-when-i-switch-a-long-term-rental-to-a-short-term-rental): Passive loss carryforwards from a long-term rental do not become deductible when you convert the property to a short-term rental. They remain suspended under IRC §469 until you sell the property in a fully taxable transaction or generate passive income from other sources. New losses generated after the conversion are non-passive from day one and offset W-2 income immediately.
- [Personal Service Days vs. Rental Days: What Actually Counts When Calculating Your STR Average Stay for the 7-Day Rule](https://strhours.com/blog/personal-service-days-vs-rental-days-what-actually-counts-when-calculating-your-str-average-stay-for-the-7-day-rule): For the 7-day average stay test under Treas. Reg. §1.469-1T(e)(3)(ii)(A), only nights a guest rents at fair market value count as rental days. Personal use days, maintenance/service days, and vacant turnover days are all excluded from both the numerator and denominator of the average stay formula.