Texas short-term rental owners can offset active income using cost segregation and material participation rules, but many CPAs miss this due to outdated depreciation assumptions.

Why STR Owners Have an Edge

Short-term rentals (average stay ≤7 days) may avoid passive loss limitations under IRC §469 when material participation is met.

This allows:

• Accelerated depreciation

• Losses against W-2 or business income

• Front-loaded deductions during peak earning years

Why Cost Segregation Is Still Missed

Most CPAs:

• Use straight-line depreciation

• Avoid engineering studies

• Assume residential property doesn’t qualify

Lakeline Tax partners with engineering-backed cost segregation specialists and integrates depreciation into income forecasting—not just reporting.

Lakeline Real Estate Tax Advisory

Anchor text:

As outlined in Lakeline Tax’s OBBB Texas tax strategy guide…

Own STRs and earn $250K+? Your depreciation may be working against you.
Request an STR tax review