Can You Claim Bonus Depreciation on Your Airbnb Furniture?
- Rick Ruberg
- Jul 15
- 4 min read
Short answer: yes.
But the size of your deduction changes dramatically depending on what's inside the property.
Furnishings (furniture, appliances, decor, electronics) are classified as tangible personal property under the tax code. Personal property falls into 5-year and 7-year MACRS recovery periods. That means it qualifies for 100% bonus depreciation.
A furnished short-term rental has more eligible assets than an unfurnished one. But "unfurnished" does not mean "nothing to depreciate." The building itself still has components that a cost segregation study can reclassify into shorter MACRS lives. Those components qualify for bonus treatment too.
Furnished STRs: More Assets, Bigger First-Year Write-Offs
Furniture, appliances, and guest-ready finishes are classified as 5-year or 7-year MACRS property. Under 100% bonus depreciation (permanently restored by the One Big Beautiful Bill Act for property acquired after January 19, 2025), you can deduct the full cost of these items in year one.
Here's what typically qualifies...
A fully furnished STR purchased for $800,000 might have $60,000 to $90,000 in furnishings alone. All of it is eligible for bonus depreciation. Add in site improvements and reclassified building components from a cost segregation study, and 25% to 40% of the total purchase price can shift into year one.
That is a massive acceleration compared to straight-lining everything over decades.
Unfurnished STRs: Little Less Obvious, Still Valuable
An unfurnished STR has no couches, no beds, no TVs etc. So fewer assets jump off the page. But you'd be surprised how many the building still contains components that qualify for shorter MACRS lives when properly identified through a cost segregation study.
Depreciable Assets include:
Electrical: Dedicated circuits for appliances, specialty wiring, outlet upgrades.
Plumbing: Water heaters, certain piping runs, fixture connections.
HVAC components: Ductwork, vents, thermostats, mini-split systems (portions that serve specific areas rather than the whole structure).
Interior finishes: Cabinetry, countertops, decorative tile work, accent walls, millwork, built-in shelving.
Site improvements: Same 15-year property as above. Driveways, sidewalks, fencing, landscaping, drainage, exterior lighting.
The cost segregation study reclassifies portions of the building structure into 5, 7, and 15-year buckets. Those reclassified components become eligible for 100% bonus depreciation.
You may not get as large of a first year deduction as a furnished property. But you're still pulling significant value forward.
W-2 Earners, Don't Forget the STR Loophole
Short-term rentals with an average guest stay of 7 days or fewer are not automatically classified as passive activities under IRC Section 469. If you also materially participate in the rental activity, the losses generated by bonus depreciation can offset your active income. Wages, business income, all of it.
This is the STR loophole. It works the same whether your property is furnished or unfurnished. The classification hinges on average guest stay length and your participation, not what's inside the unit.
A furnished STR generates bigger losses in year one (more bonus-eligible assets). An unfurnished STR generates smaller losses. But both can use the loophole to offset W-2 income if the participation tests are met.
A Quick Example
Say you buy a $750,000 furnished STR in 2026.
Land value: $150,000 (not depreciable)
Depreciable basis: $600,000
Cost seg reclassification: 35% to short-life property = $210,000
Year-one bonus depreciation deduction: $210,000
Now compare an unfurnished property at the same price.
Land value: $150,000
Depreciable basis: $600,000
Cost seg reclassification: 18% to short-life property = $108,000
Year-one bonus depreciation deduction: $108,000
Both are substantial. The furnished property produces roughly double the first-year write-off. But $108,000 in year-one deductions on an unfurnished property is still a game-changer for someone with $300,000 in W-2 income.
Track Airbnb Furniture Purchases for Tax Deductions
If you buy and then furnish a property yourself before placing it in service as an STR, those furnishing costs are separate depreciable assets. Each item gets its own placed-in-service date and its own MACRS classification.
That means your $15,000 in furniture and $5,000 in appliances are 5-year property. Under 100% bonus depreciation, the full $20,000 is deductible in the year you place those items in service.
Keep receipts. Keep an asset schedule. Your CPA and cost segregation specialist need clean records to support the deductions.
Conclusion
Most investors think of an Airbnb as a rental property.
The tax code often doesn't.
Under IRC Section 469, rental activities are generally considered passive, meaning losses typically can only offset passive income.
However, many short-term rentals with an average guest stay of seven days or less are excluded from the IRS definition of a rental activity for passive loss purposes. Instead, they're treated more like an operating business.
That distinction is significant.
If you materially participate in the activity, losses generated by cost segregation and bonus depreciation may be treated as non-passive and potentially used to offset W-2 income, business income, and other sources of ordinary income, without requiring Real Estate Professional Status.
A lot of the assets identified in a cost segregation study might be eligible for 100% bonus depreciation, leading to big deductions in the first year. Furnished properties often have an even larger selection of qualifying assets, while unfurnished ones can still offer considerable benefits through accelerated depreciation.
When everything is set up correctly, the blend of short-term rental tax treatment, active participation, cost segregation, and bonus depreciation opens up tremendous tax opportunities.
Consult a qualified tax professional before you dive into making decisions about bonus depreciation on your Airbnb furniture. They'll help you navigate the details based on this article.
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