Questions to ask your CPA before buying a short-term rental
Make the tax conversation specific to your situation—before it becomes a reason to buy the wrong property.
How will my intended use affect reporting?
Tell your CPA how much personal use you expect, how you plan to rent the property, and what services you may provide. Ask which records to keep and how your circumstances may affect the reporting of income and expenses.
Which participation rules could apply to me?
Ask your CPA about passive activity rules, any applicable exceptions, and documentation requirements. Do not assume that buying a short-term rental will offset other income or that someone else’s tax outcome will apply to you.
What should I understand about depreciation?
Ask how the purchase price may be allocated and how depreciation may apply. If you are considering cost segregation—a study that separates property components for depreciation purposes—ask about costs, suitability, documentation, and potential consequences on sale.
What happens when I sell or change use?
Discuss possible tax consequences of a sale, changes in personal use, or a different rental strategy. An up-front benefit should not be evaluated separately from future obligations or your overall financial circumstances.
What should I prepare before the meeting?
Bring your intended ownership structure, financing details, estimated income and expenses, personal-use expectations, and relevant tax information directly to your CPA. Do not send sensitive financial or tax documents through this website’s consultation form. Tax rules can change; consult current IRS guidance and your own advisor.