Plain-English guides to IRC §469 material participation, audit defense, and the recordkeeping that holds up.
You've heard the short-term rental tax pitch. This series walks through what it actually takes to defend it—the hours, the records, and the traps that quietly disqualify people who did the work.
Short Term RentalsThe STR tax strategy is real tax law, not a trick—but the benefit hinges on material participation, and almost no one who qualifies can actually prove it. Part 1 of the §469 Problem Series.
Material ParticipationThere are seven ways to qualify, but three matter for STR owners—and the popular 100-hour test has a trap that disqualifies well-meaning owners. Part 2 of the §469 Problem Series.
RecordkeepingTwo owners, identical work, identical hours—but one kept a contemporaneous log and one reconstructed it in April. In a substantiation fight they are not in the same place. Part 3 of the §469 Problem Series.
Material ParticipationUnder the 100-hour test your competition isn't everyone combined—it's the single person who did the most, usually the cleaner. The fix changes the denominator, and it's just good operations. Part 4 of the §469 Problem Series.
Short Term RentalsThe best STR markets are rarely where you live, and the obvious fix—a full-service manager—can quietly destroy the whole benefit. The way through is separating labor from participation. Part 5 of the §469 Problem Series.
Audit DefenseThe four marks of a defensible position—contemporaneous, specific, bounded denominator, tamper-evident—and why a spreadsheet can't produce them. The series conclusion. Part 6 of the §469 Problem Series.
Audit DefenseWhat a pair of §469 cases reveals about the evidence that actually wins a material participation fight—and the evidence that doesn't exist when you need it.
Short Term RentalsMirch v. Commissioner (T.C. Memo. 2025-128) is the freshest warning in the case law—and it torched the exact logging method most STR owners use.
Short Term RentalsPohoski v. Commissioner is required reading for every STR owner with a cleaner, co-host, or property manager—because the evidence that sank it was the evidence nobody kept.