How One Short-Term Rental Saved Me Over $100K in Taxes

Intro:
Most physicians think of taxes as a fixed cost — something you simply endure after working long hours and earning a high salary. I used to feel the same way. But in 2022, that changed. I purchased one short-term rental property, learned how to apply a powerful tax strategy, and ultimately received over $100,000 back from the IRS in one year!

This isn’t about loopholes. It’s about using the tax code the way it was written — and realizing that as physicians, we’re actually in a prime position to take advantage of it.

The Property:
In early 2022, I bought a home for $968,000. It wasn’t turnkey — I spent about $50,000 on renovations and an additional $30,000 on furnishings to prepare it as a short-term rental. I worked fast. Before the year ended, the property was operational, generating income.

But the real return came from the tax side.

The Strategy:
That year, bonus depreciation was still at 100%. I hired a cost segregation firm to accelerate depreciation on the property. The result? A $350,000 paper loss I could legally use to offset my W-2 income.

Here’s the catch: to qualify, I had to meet material participation rules. That meant I had to log the hours. I coordinated multiple contractors, minimized the time they logged, and ensured I contributed more than 100 hours and more than anyone else.

It wasn’t easy, but it was worth it.

The Outcome:
When I filed my 2022 taxes in early 2023, the $350,000 in depreciation helped significantly reduce my taxable income. The result? A six-figure refund — over $100,000 back in my account.

I used that refund to purchase additional properties.

And just like that, one short-term rental created a flywheel of wealth:

• Lower taxes

• More capital

• More assets

• More freedom

Why This Matters for Physicians:
We’re used to earning income the hard way — one shift at a time. But this strategy isn’t just for full-time investors or real estate professionals. If you're willing to learn and act, you can use real estate to unlock tax savings, too.

You’ve already mastered medicine: the same work ethic and attention to detail apply here.

Closing Thoughts:
One STR didn’t just save me six figures — it opened a new door. Real estate isn’t just about appreciation or passive income. For high-income professionals, it's also a tax strategy — one that’s underutilized and too often ignored.

If you’re serious about building long-term wealth, don’t just work harder. Learn the system. Use it.