STR Loophole: Activities That Count

To meet the requirements for the Short-Term Rental (STR) Loophole, you need to materially participate in the property’s operations, which means meeting certain hour thresholds. For STRs, the IRS allows you to qualify for material participation if you work on the rental activities at least 100 hours during the year and no one else works more hours than you.

Here’s a list of activities that you can count toward your 100 hours of material participation:

1. Advertising and Marketing

• Creating and managing listings on platforms like Airbnb, VRBO, etc.

• Responding to inquiries from potential guests.

• Handling marketing strategies to attract more bookings.

  
  

2. Guest Interaction

• Communicating with guests before, during, and after their stay.

• Coordinating check-ins and check-outs.

• Resolving any issues or handling guest requests during their stay.

  
  

3. Property Management Tasks

• Scheduling and supervising cleaning services.

• Regularly inspecting the property for maintenance issues.

• Managing restocking of supplies (e.g., toiletries, cleaning materials).

• Maintaining an inventory of furniture, electronics, or other key items.

  
  

4. Maintenance and Repairs

• Performing minor repairs yourself (e.g., fixing a leak, painting).

• Supervising or coordinating with contractors for larger repairs.

• Yard work, landscaping, or snow removal.

  
  

5. Bookkeeping and Record Keeping

• Keeping records of income, expenses, and receipts.

• Tracking and categorizing expenses related to the rental.

• Reviewing financial performance and making adjustments as necessary.

  
  

6. Administrative Tasks

• Managing the rental agreements and legal paperwork.

• Handling property taxes and insurance.

• Organizing the filing of relevant documents for tax purposes.

  
  

7. Managing Service Providers

• Hiring and overseeing cleaners, handymen, or landscapers.

• Coordinating and communicating with property management companies or concierge services if outsourced.

  
  

8. Renovations and Improvements

• Time spent planning, overseeing, or performing improvements to the property.

• Selecting and purchasing furniture, décor, or other necessary property upgrades.

  
  

9. Travel Time for Property Management

• Traveling to the property for inspections, maintenance, or management purposes (if it’s necessary for operations).

  
  

It’s important to maintain detailed records of the time you spend on these activities, as the IRS may ask for documentation to prove your material participation in the event of an audit.

Keeping a log of daily tasks and time spent will be helpful to substantiate your hours.