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STR vs MTR Tax Breakdown

Compare short- and mid-term rental tax benefits side by side.

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overview

Short-term rentals come with a tax advantage that long-term rentals simply don’t — and it’s often overlooked by professionals who assume “passive” equals better. This guide walks you through the real differences between short-term and mid-term rentals from a tax perspective, so you can make decisions based on strategy, not guesswork.

Features

• Side-by-side tax impact comparison of STR vs MTR
• REP status vs STR loophole explained
• Passive vs non-passive income classification
• Example tax savings at different income levels
• When to avoid STRs (real talk)
• Filing considerations and compliance reminders

benefits

• Choose the right rental model based on tax outcome, not hype
• Understand how to use STRs to offset W2 income
• Avoid classification mistakes that trigger audits
• Learn why “mid-term” isn’t always the safer path
• Feel confident choosing the structure that works for you

FAQs

How is short-term rental income taxed compared to mid-term rentals?

How is short-term rental income taxed compared to mid-term rentals?

How is short-term rental income taxed compared to mid-term rentals?

Why does the IRS treat STRs differently than long-term rentals?

Why does the IRS treat STRs differently than long-term rentals?

Why does the IRS treat STRs differently than long-term rentals?

Can I use STRs to take real estate losses against my W2 income?

Can I use STRs to take real estate losses against my W2 income?

Can I use STRs to take real estate losses against my W2 income?

What if I rent for both short and mid-term periods—how is that taxed?

What if I rent for both short and mid-term periods—how is that taxed?

What if I rent for both short and mid-term periods—how is that taxed?

Do I need to use a CPA familiar with STR tax rules?

Do I need to use a CPA familiar with STR tax rules?

Do I need to use a CPA familiar with STR tax rules?

Can I switch a long-term rental to a short-term rental for better tax benefits?

Can I switch a long-term rental to a short-term rental for better tax benefits?

Can I switch a long-term rental to a short-term rental for better tax benefits?

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