Short-term rentals are becoming a popular tax strategy! Why?
The tax benefits are significant. But it's not just about buying a property and hiring a manager. The key is 'material participation.'
To reap these tax benefits, you need to be actively involved. Forget letting a property manager handle everything. Your involvement is crucial. There are several tests for material participation, but the most common ones are:
1. The 500-Hour Rule: Contribute at least 500 hours of your time to managing the rental.
2. The 100-Hour Rule: Your involvement must exceed 100 hours, and it should be more than any other service provider (like cleaners or handymen).
And don't forget, for it to count as a short-term rental, the average stay should be less than seven days!
*Send this to a friend who’s looking to add short-term rentals to their tax strategy
Always consult your accountant or tax professional for your specific situation
