100% Bonus Depreciation Is Back–Here’s What It Means for Nashville STR Owners
If you own or are thinking about buying a short-term rental in Nashville, the new tax law just brought back a major advantage: 100% bonus depreciation.
That means you can deduct the full cost of qualifying property—like furniture, appliances, and renovations—in the first year instead of spreading it out over decades. It’s one of the biggest financial wins for Nashville investors in years.
Why This Matters for Nashville Real Estate Investors
Nashville’s booming tourism makes it one of the hottest short-term rental markets in the country. With 100% bonus depreciation back in play (as of January 19, 2025), investors can dramatically reduce taxable income in year one—keeping more cash to reinvest in Music City real estate.
Paired with a cost segregation study, you can separate parts of your property (like flooring, lighting, and fixtures) into shorter depreciation schedules and deduct them right away.
How to Qualify for Bonus Depreciation
To take full advantage of this tax break, your property needs to qualify as a non-passive business activity under IRS rules. That means:
Average guest stays under 7 days
You actively manage the property (handling bookings, maintenance, guest communication, etc.)
When those two boxes are checked, your short-term rental losses—including the bonus depreciation deduction—can offset your regular income (like W-2 wages or business earnings).
Smart Steps for Nashville STR Owners
Work with a local CPA who understands short-term rental tax strategy.
Order a cost segregation study before placing your property in service.
Track your management hours and expenses carefully.
Time your renovations and purchases for after January 19, 2025.
The Bottom Line
For Nashville short-term rental owners, the return of 100% bonus depreciation is more than a tax break—it’s a chance to build wealth faster (and invest in more properties).
If you’re planning to buy, renovate, or expand your Airbnb portfolio in Nashville, we can help you find properties that fit your investment goals and set you up for maximum tax benefits.
💡 Thinking about starting or scaling your short-term rental portfolio in Nashville?
Let’s talk. Our team at Nashville Loves You helps investors navigate the local market—smartly, strategically, and with heart.
Disclaimer: We’re real estate agents, not tax wizards. We can help you find the perfect Nashville property — but when it comes to crunching IRS code, call your CPA. Always verify your tax strategy with a professional before making moves.
