MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Why Short-Term Rentals Still Have a Tax Advantage

17 Mar 2026 · 1 min

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Mark Kohler explains how short-term rentals like Airbnb and VRBO get a tax break because the IRS hasn't updated its rules for the sharing economy. For a decade, the IRS has treated them like bed-and-breakfasts, letting owners deduct expenses and use favorable tax rules unavailable for standard long-term rentals. This advantage will likely disappear once regulations catch up.

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Now, some of you might go, well, why is this short-term rental strategy called a loophole? People, the IRS moves at the speed of, well, I don't know, they move so slow. 10 years ago, short-term rentals didn't even exist. How many of you 10 years ago had a VRBO or Airbnb app on your phone? No one did. And so there's just been this period of time where the IRS and regs have not caught up yet and put the short-term rentals in the same bucket as long-term rentals. The short-term rental is in the bucket of a bed and breakfast. That's the rule for bed and breakfast.