Disclaimer: I am sharing this information based on my experience as a real estate investor to help you understand the potential of the “BBB” and 100% Bonus Depreciation. However, I am not a CPA. The tax code is complicated and changes often! Please use this post as a starting point for a conversation with your own tax advisor, not as final legal advice.

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Based on the current tax laws as of January 2026, here is the explanation for the “BBB” (referring to the recent One Big Beautiful Bill Act or OBBBA, which reinstated these benefits) and how it applies to Airbnb investors.

The “BBB” and Real Estate: What it Offers

The acronym “BBB” to refer to the recent legislative changes (OBBBA) that permanently reinstated 100% Bonus Depreciation.

For a real estate investor, this is a massive tax incentive. It allows you to deduct the entire cost of eligible parts of your property (like furniture, appliances, and landscaping) in the very first year you buy it, rather than waiting 27.5 years to slowly deduct them.

When combined with an Airbnb (Short-Term Rental) strategy, this creates a powerful opportunity:

1. Create a “Paper Loss”: You use Bonus Depreciation to show a large loss on your tax return (even if you made cash profit).

2. Offset W-2 Income: If you qualify as an active Airbnb host (the “Loophole”), you can use this loss to lower the taxes you owe on your day job (W-2) income.

Main Qualifications for 100% Bonus Depreciation

To get the 100% write-off, you generally need to meet these criteria:

1. Placed in Service: The property must be ready and available for rent.

2. New to You: You can buy a used house, but it must be a new purchase for you. You cannot depreciate a house you essentially bought from yourself or a related party.

3. Cost Segregation Study: To legally claim this, you must hire a professional to perform a “Cost Segregation Study.” This study identifies exactly which parts of the house qualify for the 20-year-or-less rule.

The “Airbnb Loophole” (Crucial for Investors)

Just getting the depreciation isn’t enough; you need to be able to use it. Normally, rental losses are “passive” and cannot lower your W-2 tax bill. However, Airbnb hosts can bypass this if they meet the Short-Term Rental (STR) Rule:

1. Average Stay: The average guest stay must be 7 days or less.

2. Material Participation: You must prove you are running the business, not just investing. You can do this by meeting one of these tests:

   • You spend 500+ hours on the business in a year.

   • OR: You spend 100+ hours, and no other individual (including cleaners or managers) spends more time than you.

Financial Example: $400k House

Here is a simple breakdown of how the numbers work for a house purchased for $400,000.

The Purchase:

• Total Price: $400,000

• Land Value (Never depreciable): -$100,000

• Building Basis: $300,000

The Cost Segregation:

You hire a firm to do a study. They determine that roughly 25% of the building’s value is made up of “short-life” assets (flooring, cabinets, walkways, etc.) eligible for Bonus Depreciation.

• Bonus Eligible Amount: $300,000 × 25% = $75,000

The Tax Savings:

Instead of deducting that $75,000 slowly over 27.5 years, you deduct it all in Year 1.

Result: Even though you made $10,000 in cash profit, the IRS sees a -$65,000 loss. You pay $0 tax on the rental income, and you can use the remaining -$65,000 loss to lower your taxable W-2 salary, resulting in a refund check or lower tax bill of roughly $20,800.