Turbo tax desktop version 2025 (personal tax return)

Namaste  --- is this what you are talking about ? [edited]

"The short-term rental loophole, also known as the STR loophole, is an IRS-recognized tax strategy that treats rental properties with average guest stays of seven days or less as active businesses. When combined with material participation and cost segregation, this classification allows investors to deduct accelerated depreciation against ordinary income, including W-2 wages.

Traditional long-term rentals face passive activity loss limitations unless the owner achieves real estate professional status. Short-term rental properties bypass this requirement through material participation rules. An owner who participates 100+ hours annually in their STR operations can deduct losses against ordinary income without a real estate professional designation.

The tax code treats short-term rental properties as Schedule C businesses when properly structured. This treatment enables accelerated depreciation deductions that offset W-2 income, business profits, and investment gains."

NOTE that this suggests that STR ( of seven days or less rental at a time ) is treated as a Schedule-C business and therefore  TurboTax already supports this.  You just file a Schedule-C instead of a Schedule-E.    I am assuming that you are operating this through an LLC and therefore the K-1.  If this is your first year at this , I would strongly suggest using a tax professional --- I say this because  a Schedule-C  may be better handled at the entity level ( unless of course  you are a single member LLC, in which case K-1 gets you back to the same question of entity vs share holder ).

Is there more I can do for you ?

Namaste ji

pk