343. 100% Bonus Is Back: Is Now the Time for a Short-Term Rental?

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Sep 3, 2025

This discussion delves into the return of 100% bonus depreciation and its impact on real estate investors. Discover why tax planning is crucial for existing landlords to avoid missing out on savings. Learn how to evaluate if short-term rentals align with your lifestyle and financial goals. They provide a framework for estimating first-year tax savings and stress the importance of timing in tax strategy engagement. With deadlines approaching in 2025, there's urgency for new investors to act swiftly and consult financial advisors to maximize their opportunities.

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INSIGHT

Why Short-Term Rentals Appeal To W-2 Earners

Short-term rentals are the most viable path for many W-2 earners who cannot qualify as real estate professionals.
The short-term rental strategy can deliver big first-year tax benefits with manageable time commitments.

ADVICE

Quick Framework To Estimate Tax Savings

Use a simple framework to estimate first-year tax savings: building value × bonus-eligible percentage × bonus rate × marginal tax rate.
Use 20–30% (25% typical) of building value as a starter estimate for bonus-eligible components.

INSIGHT

Bonus Depreciation Is Front-Loaded

100% bonus depreciation front-loads most tax benefits into the first year after acquisition.
To sustain annual tax sheltering, you must continually acquire bonus-eligible property each year.

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In this episode of the Tax Smart REI Podcast, Thomas Castelli and Ryan Carriere, CPA, break down the two most common questions investors are asking after the passage of the “Big Beautiful Bill” and the return of 100% bonus depreciation: - Should you invest in real estate or specifically short-term rentals for tax savings? - When does it make sense to start working with a tax strategist? Tune in to learn: - Why existing landlords who haven’t done tax planning may be leaving money on the table - How to decide if short-term rentals make sense for your goals, lifestyle, and time commitment - A step-by-step framework for estimating your first-year tax savings using bonus depreciation - The reality of material participation, hours required, and capital needed to get started - When to engage a tax strategist if you’re already in the game or just getting started - Why time is running short in 2025, and how late you can still implement this strategy To become a client, request a consultation from Hall CPA, PLLC at go.therealestatecpa.com/3KSEev6 Get your FREE ticket to the 2025 Tax, Legal, and Wealth Summit: www.taxandlegalsummit.com/registration Subscribe to REI Daily & Enter to Win a FREE Strategy Call: go.therealestatecpa.com/41JuQBX The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.