Short-Term Rentals Can Slash Your Taxes — But Only If You Play by the Rules. Want the real breakdown? Drop "GOB" below and I’ll send you a free training on how to Win At The Game Of Business. Here’s the truth: Real estate investments are by default passive activities. Since 1986, passive losses can’t offset W-2 or active business income. But… there are exceptions. One of them is the short-term rental loophole. When done correctly, it’s one of the most powerful tax strategies available to business owners and high-income W-2 earners. When done wrong, it’s an audit waiting to happen. What it takes to qualify: 100+ hours of active management by you. No one else can log more hours than you (no hands-off outsourcing to property managers). Your time must fall within one of the IRS’s 11 qualifying activity types — or it doesn’t count. Get this right, and you can unlock huge deductions — especially now that the One Big Beautiful Bill has restored 100% bonus depreciat...