High W-2 Earner Offsetting Income Through a Newly Acquired Short-Term Rental in Year One
$198,700
Estimated Annual Tax Reduction
34.9% → 27.8%
Estimated Effective Federal Tax Rate
$1,060,000
Total Annual Income
Client Profile
Senior corporate manager with a large W-2 salary who purchased a short-term rental late in the year.
W-2 income: $910,000
STR gross income: $140,000
STR net income pre-planning: $62,000
Strategy Overview
The goal was not to eliminate tax, but to create immediate relief in the acquisition year without aggressive assumptions.
Implementation Highlights
• Average stay under 5 nights
• Owner materially participated during onboarding and launch
• Cost segregation performed immediately after purchase
• Bonus depreciation applied conservatively
Key Results
Accelerated depreciation generated approximately $260,000 in deductions.
$260,000 × ~38% blended rate ≈ $98,800
Additional STR expense deductions and classification benefits created the remainder of the savings.
Outcome
Meaningful reduction in W-2 tax exposure in year one, setting the foundation for larger savings in future years.
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