Unlocking the STR Tax Loophole with Amanda Han, CPA

If you’ve been on social media for more than a few minutes, you’ve probably seen some version of this advice: “Want to pay less taxes? Buy a short-term rental!” But is it really that simple? In episode 465 of the Thanks for Visiting podcast, we sit down with Amanda Han, CPA and tax strategist, to demystify the so-called STR tax loophole and show short-term rental owners what they can (legally) do to reduce their tax burden.

What is the STR Tax Loophole?

The short-term rental tax loophole refers to a unique opportunity in the tax code that allows certain STR owners to claim real estate losses without qualifying as a real estate professional. That’s huge—because the traditional path to using real estate losses to offset W2 income requires proving that real estate is your primary profession. The STR loophole sidesteps this requirement if you meet specific material participation criteria.

What is Material Participation?

Material participation is different from being a real estate professional. Amanda explains that if your STR’s average guest stay is 7 days or less, the IRS classifies it as a business rather than a rental activity. This means you can claim losses against your other income—as long as you materially participate in managing the property.

There are three main ways to qualify:

1. You (and your spouse, if filing jointly) spend 500+ hours on the property.
2. You spend 100+ hours, and no one else (e.g., your cleaner, property manager, etc.) spends more time than you.
3. You spend more time than everyone else combined—even if it’s fewer than 500 hours.

If you meet one of these, you may be eligible to claim losses from your STR against W2 income—even if you also work a full-time job.

Where the Savings Come From

The biggest tax benefit comes from depreciation—writing off the value of your building and its contents over time. With a strategy like cost segregation, you can accelerate depreciation and take larger deductions in your first year of ownership. Amanda warns that you should only do this if you actually qualify to use the losses—otherwise, they may be “trapped” as passive losses you can’t use right away.

Common Mistakes Hosts Make

Amanda shares that even some CPAs don’t fully understand the STR loophole—and that misinformation is rampant. A few mistakes to avoid:

• Holding your STR in an S Corp (don’t do it!)
• Assuming midterm rentals qualify (they usually don’t)
• Not tracking hours correctly (you need detailed logs)
• Rushing into cost segregation without confirming eligibility

Pro Tips from Amanda

• If you want to qualify, track your hours as you go, not at the end of the year.
• Keep your STR expenses separate from your personal accounts.
• If you’ve already filed and think you missed out, you may be able to amend or catch up next year—talk to your CPA.

Final Thoughts

This episode is packed with practical tips and important distinctions that every host should understand—especially as the tax landscape continues to evolve. If you’ve got one or more short-term rentals and want to reduce your tax liability, this conversation with Amanda Han is a great place to start.

Download a transcript of this episode.

Resources:

• Hostfully | Use Code TFV500 for $500 off!
• Minoan | Visit MinoanExperience.com and tell them TFV sent you!
• Amanda’s Website: Keystone CPA
• Amanda on Instagram
• Amanda’s YouTube Channel
• STR Host Tax Advantage Cheat Sheet
• Should You Fire Your Property Manager? (Or Are Your Expectations Misaligned?) | Subscribe to our YouTube channel
• #STRShareSunday: @roostwithaview
• Submit your property for our next #STRShareSunday at strshare.com

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Roost With a View is a secluded, cozy retreat in the Catskill Mountains, perfect for a relaxing getaway or outdoor adventure. The host does an incredible job of keeping the listing seasonally updated—right now, the hero image shows a dreamy winter scene with a steaming hot tub that’s just begging for a soak. Inside, you’ll find an 8-foot projector screen, a record player, board games, and retro Nintendo, while outside, there’s a private sledding hill, a fire pit, and a creekside picnic setup. Whether you’re coming to unwind or explore, this spot has everything covered. Follow @roostwithaview for a closer look at this thoughtfully curated retreat!

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