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Airbnb Tax Calculator: taxable income and depreciation

Enter the purchase, your income and your tax rates. See taxable STR income or loss, depreciation and the average-stay test. Not tax advice.

No account neededFree PDF report

Examples computed by this calculator on sample inputs. Not market data.

Your property and tax rate

  • No account needed
  • Airbnb fees per Help Center article 1857
  • Every formula shown, sources dated
  • Free PDF report with every chart
How it works

Three steps. About a minute.

  1. Step 1: Enter purchase and income

    Price, land share, nightly rate and your marginal tax rates. Operating costs start on a sample you can edit.

  2. Step 2: See the taxable result

    Taxable income or loss, depreciation on the building and furnishings, and the average-stay test that decides how a loss is treated.

  3. Step 3: Take it to your CPA

    Download the PDF with the depreciation schedule and the tax effect in each scenario.

Your report

What you'll get

Taxable STR result (a loss)From the sample
THE HEADLINE

Taxable STR income or loss for the year

NOI less mortgage interest and depreciation. A cash-positive door often shows a tax loss, and whether you can use that loss depends on the tests further down.

  • Taxable STR result
  • Income before depreciation
  • First tax year result

Showing part 1 of 5: Taxable result

  • Taxable STR income or loss for the year
  • Depreciable basis with land taken out
  • Cost segregation on and off, side by side
  • Short-term and long-term rental rules compared
  • Tax saved or owed in each participation scenario

From rental income to a taxable result

Income to taxableFrom the sample

Start with net operating income, after every deductible operating cost. Take off the year's mortgage interest, then depreciation. What is left is the taxable result, and on a recently bought STR it is often a loss.

Principal is not deductible, and an unspent capex reserve is not deductible until you spend it, so this calculator adds the reserve back. Everything here is an estimate from your inputs. Confirm it with a CPA before you file.

Tax mistakes this calculator catches

These come up every filing season. The numbers below are from the sample property; yours will differ, and a CPA has the final word.

  1. 01Depreciating the land

    Land is never depreciable. At a 20% land share on a $437,750 basis, $87,550 comes out before you divide by 27.5 years.

  2. 02Assuming any loss offsets your salary

    With a 3.2-night average stay the activity is not a rental activity under the passive rules, so the loss turns on material participation. Without it, the sample's $36,648 loss is suspended and saves $0 this year.

  3. 03Missing the first-year pro-ration

    A property placed in service in March gets about ten months of building depreciation in year one: $10,082 on the sample, not $12,735.

  4. 04Treating cost segregation as a saving

    Reclassing 20% moves $67,493 of depreciation into year one. Over the property's life the total is the same, and the reclassed part can be recaptured as ordinary income on sale.

Depreciation: the building only, never the land

Depreciation scheduleFrom the sample

Under IRS Publication 527, a residential rental building depreciates over 27.5 years with a mid-month convention in the first year, and land is not depreciable at all. That makes the land share you enter matter more than most people expect.

Furniture and appliances are 5-year property. For property acquired after Jan 19 2025 they can take 100% bonus depreciation in year one. Some advisers apply 39 years to transient-use property, so ask your CPA which period fits.

The average-stay test decides how a loss is treated

Tax saved, by scenarioFrom the sample

When your average stay is 7 nights or less, the activity is not treated as a rental activity under Treas. Reg. 1.469-1T(e)(3)(ii)(A). Whether a loss can offset other income then turns on material participation, which your CPA has to confirm.

MagicBNB's Starter templates include a tax filing report, so the year's income and expenses reach your CPA in one export.

How operators use it

  1. Operator before a CPA meeting

    Bought a door in spring and wants to know roughly what to expect.

    Arrives with the bridge, the basis and the 7-day test result, so the meeting starts at the decisions instead of the data entry.

  2. Buyer comparing STR and LTR use

    Unsure whether to run nightly or lease the property.

    Reads the rules table to see how much of the loss each use makes usable at their income.

STR tax, worked through (not tax advice)

Can Airbnb losses offset W-2 income?

Sometimes. With an average stay of 7 nights or less, the activity is not a rental activity under the passive rules, and a loss can offset other income if you materially participate. A CPA has to confirm that.

The rule is in Treas. Reg. 1.469-1T(e)(3)(ii)(A). It is why the 7-day test result sits near the top of the report. The sample averages 3.2 nights, so it meets the test.

Without material participation, the same loss is passive and suspended: carried forward, not lost, but no help this year. As a long-term rental instead, an active participant could use up to $25,000 of loss, reduced by half of modified adjusted gross income over $100,000 (IRC section 469(i), IRS Publication 925).

Sample: $36,648 loss, 24% marginal rate, $120,000 MAGI
  • STR, you materially participate$36,648 usable, $8,796 tax saved
  • STR, you do not$0 usable, $36,648 carried forward
  • Long-term rental$15,000 usable, $3,600 saved, $21,648 carried forward

How do I work out the land value for depreciation?

Use the land share from your property tax assessment or an appraisal, and take it out of the basis before depreciating. On the sample, a 20% land share removes $87,550.

Land is never depreciable (IRS Publication 527). Only the building and its contents are. The land share is one of the largest assumptions in your depreciation, so use a documented figure your CPA can support rather than a convenient one.

A higher land share means less to depreciate each year. On the sample, every 5 points of land share moves about $21,900 of basis, about $800 a year of building depreciation.

Sample basis
  • Price plus closing costs$437,750
  • Land excluded (20%)-$87,550
  • Building basis$350,200
  • Divided by 27.5 years$12,735 a year

How much depreciation do I get in the first year of an Airbnb?

Building depreciation is pro-rated from the month you placed it in service, plus whatever short-life property you expense. The sample, placed in service in March, gets $10,082 of building depreciation in year one.

Residential rental buildings use a 27.5-year, mid-month convention (IRS Publication 527). Placed in service in March, the sample gets nine and a half months in year one rather than twelve. Some advisers apply 39 years to transient-use property; ask your CPA which applies to you.

Furnishings are short-life property. For property acquired after January 19, 2025, this calculator takes them as 100% bonus depreciation in year one, which is why the sample's $30,000 of furnishing lands entirely in its first year.

Sample, depreciation in years 1 and 2
  • Year 1$10,082 building + $30,000 short-life = $40,082
  • Year 2 onwards$12,735 building

How much tax does an Airbnb loss actually save?

The usable loss times your combined marginal rate. The sample's $36,648 loss at 24% saves $8,796 this year, if the loss is usable.

Cash-positive properties often show a tax loss because depreciation is a deduction with no cash attached. The sample's income before depreciation is $6,086; depreciation turns it into a $36,648 loss.

A loss is not free money. Depreciation lowers your basis, and on a sale part of it can be recaptured. Cost segregation pulls depreciation forward rather than adding to it. Plan the sale with your CPA before you count the savings.

Where it fits in your tax year

  1. When you buy

    Run it with your price, land share and month placed in service. Note the 7-day result; it shapes how you track your hours.

  2. Before year end

    Rerun with real income and interest. Decide with your CPA whether a cost segregation study is worth ordering before you file.

  3. At filing

    Send real numbers. MagicBNB's PDF + Excel dual export gives your accountant per-property figures in Excel.

Terms on this page

Depreciation
A yearly deduction for wear on the building, spread over 27.5 years for residential rentals.
Basis
What you paid plus closing costs, the starting point for depreciation.
7-day test
If the average guest stay is 7 nights or less, the passive-loss rental rules treat it differently.
Material participation
Enough personal involvement for a loss to count against other income. A CPA confirms it.
Cost segregation
A study that reclassifies parts of a building to shorter lives so depreciation arrives sooner.
Suspended loss
A loss you cannot use this year that carries forward to future years or a sale.

Questions

Do I pay taxes on Airbnb income?

Yes, rental income is taxable whether or not you get a Form 1099-K. Under IRS Fact Sheet 2025-08, platforms report at $20,000 and 200 transactions, but that is a reporting threshold only. What you owe is based on the taxable result after expenses and depreciation, which can be a loss.

What Airbnb expenses are tax deductible?

Ordinary operating costs: the platform fee, cleaning, supplies, repairs, management, property tax, insurance, utilities, software and mortgage interest, plus depreciation on the building and furnishings. Principal is not deductible, and an unspent capex reserve is not deductible until it is spent. Confirm specifics with a CPA.

How does depreciation work on a short-term rental?

The building is depreciated over 27.5 years with a mid-month convention in the first year, and land is not depreciable at all (IRS Publication 527). Furniture and appliances are 5-year property, and property acquired after Jan 19 2025 can take 100% bonus depreciation in year one. Some advisers apply 39 years to transient-use property, so ask your CPA which period applies.

Schedule C or Schedule E for Airbnb?

Most hosts report on Schedule E. Schedule C generally applies when you provide substantial services, such as daily cleaning or meals, which makes it a business subject to self-employment tax. This calculator estimates income tax only and does not decide which schedule you use.

What is the 14-day rule for Airbnb taxes?

If you rent a home you also live in for 14 days or fewer in a year, that rental income is generally not reported. It is a different test from the 7-night average-stay test this calculator checks, which decides whether the activity counts as a rental activity for passive loss purposes.

Does cost segregation lower my taxes or just move them?

It moves them. A study reclasses part of the building into shorter-life property, so more depreciation lands in the early years and less later. The total deduction is the same, and the reclassed part is recaptured as ordinary income if you sell. The results show both cases side by side. This is an estimate, not tax advice.

Do I have to report Airbnb income if I did not get a 1099-K?

Yes. Form 1099-K reporting applies at $20,000 and 200 transactions per platform (IRS Fact Sheet 2025-08), but all rental income is taxable whether or not a form arrives.

Is a capex reserve tax deductible?

No. Money set aside but not spent is not an expense. This calculator adds the reserve back before the taxable result; the repair or replacement is deducted or depreciated when it happens.

Does furniture depreciate faster than the building?

Yes. Furniture and appliances in a residential rental are 5-year property (IRS Publication 527). This calculator expenses them in year one for property acquired after January 19, 2025.

What happens to depreciation when I sell?

Part of it can be taxed back on sale, and cost segregation reclasses can be recaptured as ordinary income. The total effect depends on your situation; ask a CPA before the sale, not after.

Is this calculator tax advice?

No. It is an estimate from your inputs to prepare for a conversation with a CPA, who has to confirm participation, the recovery period and your filing position.

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PDF + Excel dual export

Hand your CPA a file they can use

This calculator estimates one property's tax year. MagicBNB's PDF + Excel dual export sends the per-property numbers as a PDF for you and an Excel file for your accountant, from the same report.

Two more places this shows up in MagicBNB

  • Starter templatesA pre-built tax filing report, so year-end numbers come out in the same layout every year.
  • Smart transaction ledgerEvery bank transaction gets a suggested category and can be split across properties, which is what deductible expenses need at filing time.
Export a CPA-ready report
Go deeper

Your tax-year numbers, run in depth, all year

This estimate is the quick look. MagicBNB runs the same numbers in depth and in real time, property by property, in a Profitability & P&L view ready for your CPA.

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