Catherine BellEmpowering Women to Create Financial Freedom Through Passive Income, Real Estate, and Social Impact

Airbnb is COMMERCIAL Property? IRS Tax Secrets REVEALED! #shorts

20 Aug 2026 · 1 min

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In this YouTube short, the speaker explains that the IRS treats short‑term Airbnb rentals (seven days or less) as commercial property, similar to a hotel, rather than a long‑term residential lease. Because of this classification, the property must be depreciated using the commercial straight‑line schedule of 39 years. The speaker then outlines a simple cost‑segregation approach: using the purchase price or appraisal value, the owner allocates portions of the basis to individual components such as carpet, luxury vinyl plank (LVP), plumbing, and HVAC. By breaking the $1 million basis into these asset categories, the owner can potentially accelerate depreciation on the shorter‑life components, maximizing tax benefits.

Chapters

If we're talking about Airbnb, that's considered commercial because the rental is 7 days or less. So the IRS says that's more like a hotel than a long-term rental. So we're going to treat it as a commercial asset. So if you were to straight-line depreciate it, it would be over 39 years of the basis, right? Right. But what we do to break it down even more simple is when you bought that property, you probably got an appraisal on it if you got financing. And so you got an appraisal and the appraiser says it's worth $1 million. Cool. What we go in is not so dissimilar as an appraiser, although we're not appraisers, we're engineers, is we go in and say, great, it's $1 million and you paid $1 million for it. Let's, let's break down each component and say that $1 million equals, you know, $25,000 of carpet, $10,000 of LVP, $50,000 of plumbing, $100,000 of HVAC. I'm making numbers up. But at the end of the day, we, we take that, that $1 million and break it out into the individual components that make the property.