Sec 179 depreciation

[Yatri24]

My spouse have W 2 income of around 120K and I have a property for airbnb only which I materially participate in. The house ( around 100Khas never been lived in and not used for vacation or any personal use. Can we deduct the cost of the property minus land under sec 179 from the W 2 income as so far we have no income from airbnb yet?

[tagteam]

Material participation is insufficient to use Section 179; the activity must rise to the level of a trade or business.

The actual real estate itself (i.e., the building) is not covered by Section 179 anyway.

[Yatri24]

Thank you so much for your response. Let me add further details to my query. We are registering that property under a LLC and I will be qualified as a realtor. But it will be used as a STR property only.

My investment consultant is saying that it qualifies as QIP and we can take either sec 179 deduction of the value of the house minus land and bonus depreciation of 60% if needed.

[tagteam]

See https://www.thetaxadviser.com/issues/2021/sep/qualified-improvement-property-bonus-depreciation.html