Short-term rental (STR) depreciation is different from long-term rental depreciation because STRs are often treated as an active business rather than a passive rental. This affects how depreciation is calculated, how personal use limits deductions, and which assets qualify for accelerated depreciation.
For Mammoth Lakes vacation rental owners, understanding these differences can help reduce taxable income and improve long-term profitability—especially when working with a local Mammoth Lakes property management team.
The IRS defines a short-term rental as a property that is:
Key tax implications for STR owners
These rules apply nationwide, including California, but they are especially relevant in highly regulated markets like Mammoth Lakes.
| Feature | Short Term Rental (STR) | Long Term Rental (LTR) |
|---|---|---|
| Typical stay length | Less than 30 days | 6 months or more |
| IRS treatment | Often business income | Passive rental income |
| Depreciation method | Modified Accelerated Cost Recovery System | Modified Accelerated Cost Recovery System |
| Depreciation life | 27.5 or 39 years | 27.5 years |
| Personal use impact | Can reduce deductions | Less restrictive |
| Bonus depreciation | Often available | Limited |
Changes in 2018 introduced limits on depreciation for certain short-term rentals.
This applies if a property is:
Rented for more than 140 days per year, and
Used personally by the owner or their family for more than 14 days or 10% of the rented days (whichever is greater)
Properties in this category may experience slower depreciation deduction rates compared to traditional long-term rentals, meaning it takes longer to claim the full depreciated value.
For Mammoth Lakes vacation rental owners, understanding these phase-out rules is crucial to maximize tax benefits while remaining compliant. Many rely on professional property management in Mammoth Lakes to ensure accurate tracking of rental vs personal days.
Depreciable life can seem complicated, but it’s key to tax savings.
Depreciable Life: Residential rental properties, including STRs like Airbnb rentals, generally have a depreciable life of 27.5 years.
MACRS: The Modified Accelerated Cost Recovery System is used to calculate depreciation. For STRs subject to phase-out, MACRS may apply a slower depreciation schedule.
Rental Activity vs Personal Use: The more the property is rented, the more depreciation you can claim. Personal use reduces allowable benefits.
A STR begins depreciating when it is “placed in service,” meaning the property is ready and available to rent.
Wondering how much you can depreciate your Mammoth Lakes short-term rental?
Try out this rental property depreciation calculator.
Contact us today to discover how our expert team can maximize your rental income and ensure your property is in top shape.
How To Turn Your Mammoth Lakes Condo / Apartment Into a..
Depreciation is especially relevant for Mammoth Lakes short-term rental owners because the local market is highly seasonal. Peak demand comes during ski season and summer tourism, while shoulder seasons see lower occupancy. This variability makes it crucial to track rental versus personal use days, as even a few personal-use days can reduce the depreciation you’re allowed to claim.
Additionally, Mammoth Lakes has specific regulations and permit requirements for short-term rentals. Keeping accurate records not only helps maximize depreciation deductions but also ensures compliance with local laws.
Finally, understanding depreciation allows owners to plan property improvements strategically. Upgrades to furniture, appliances, or other capital assets can increase rental appeal while qualifying for depreciation, improving long-term profitability.
Depreciation for short-term rentals is more complex than most owners expect, particularly in California. Between IRS classification rules, personal use limits, phase-out thresholds, and MACRS schedules, a small mistake can mean missed deductions.
How Professional Property Management Simplifies Depreciation
Professional property management ensures:
Working with a professional gives peace of mind, letting owners focus on maximizing rental income without navigating complex tax rules alone.
A focused strategy combining management, marketing, and local market knowledge is key.
These strategies make your Mammoth Lakes vacation rental both profitable and compliant.
Book a consultation with our property management experts today.
Interested in renting your condo or apartment out in Mammoth Lakes..
Yes — a cost segregation study can reclassify portions of the property (like appliances, furniture, land improvements) into shorter depreciation classes (e.g., 5–15 years), potentially increasing early-year deductions.
Potentially. If a short-term rental provides substantial services (such as frequent cleaning, concierge-style support, or meals), the IRS may treat it more like a business than a passive rental, which can affect depreciation rules and deductions.
Because STRs are often used by owners during peak seasons, personal use can significantly reduce allowable depreciation. Long-term rentals typically have minimal personal use, making depreciation more straightforward.
It can be. Certain STRs are subject to additional limitations or slower depreciation schedules if they exceed personal-use thresholds or fall into specific IRS categories. Long-term rentals usually follow a more predictable depreciation path.
Property Manager and Airbnb Host
Jessica Rivera is a dedicated property manager and Airbnb host with 10 years of experience in real estate. Based in Irvine, she excels at creating exceptional guest experiences and helping property owners maximize their rental income. As an Airbnb Superhost, Jessica’s attention to detail and commitment to hospitality set her apart in the industry.
Join our mailing list and receive special offers, updates, and discounted packages directly to your email.
By clicking “Submit”, you are signing up to receiving emails from us. You can unsubscribe whenever you like. SMS rates may apply.
Explore our blog for expert tips, best practices, and insights that can elevate your rental game.
Join our mailing list and receive special offers and important marketing information directly to your email.
By clicking “Submit”, you are signing up to recieving emails from us. You can unsubscribe whenever you like.
