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Audit support includedFlat price for every study3 to 5 business days Furniture, appliances, and other personal property inside a furnished rental qualify for 100% bonus depreciation in 2026 when acquired and placed in service after January 19, 2025, under the One Big Beautiful Bill Act (OBBBA), letting you deduct the full cost in the year you place the asset in service. The building shell itself doesn't get this treatment: it still depreciates over 27.5 years on a straight-line schedule, and only the assets a cost segregation study identifies as 5-year, 7-year, or 15-year property qualify for the 100% write-off.
- Furniture, appliances, and land improvements qualify for 100% bonus depreciation in 2026 under OBBBA when placed in service after January 19, 2025.
- The building itself still depreciates over 27.5 years and never gets bonus treatment.
- A $500,000 furnished rental with 25% reclassified generates roughly $46,250 in first-year tax savings at a 37% bracket.
- Bonus depreciation on furnished rental property only reaches its full value when a cost segregation study documents which assets qualify.
Why this matters
Most furnished rental owners already deduct the cost of a new sofa or a refrigerator over several years using standard depreciation tables. That's leaving money on the table if the asset qualifies for bonus depreciation instead.
Under OBBBA, the 100% bonus depreciation rate that expired at the end of 2022 came back for assets acquired and placed in service after January 19, 2025. That means a couch bought for a short-term rental in February 2026 can be written off in full during the 2026 tax year, not spread across five years. The furnished rental appliances classification guide walks through how individual items get sorted into asset classes, which is the step that actually unlocks this benefit.
Bonus depreciation for furnished rental property, broken down
The IRS doesn't classify "furnished rental property" as one asset. It classifies each component separately, and only some of those components carry a recovery period short enough to qualify for bonus depreciation.
| Asset type | Recovery period | Bonus depreciation eligible |
|---|---|---|
| Furniture, appliances, decor | 5-year | Yes, 100% in 2026 |
| Carpet, certain flooring, some fixtures | 5-year or 7-year | Yes, 100% in 2026 |
| Driveways, landscaping, fencing | 15-year | Yes, 100% in 2026 |
| Building structure (walls, roof, foundation) | 27.5-year | No, straight-line only |
Here's a working example, assuming a cost segregation study reclassifies 25% of a property's value into shorter-life categories, a common outcome for furnished short-term rentals. On a $500,000 property, that's $125,000 moved into 5-year, 7-year, and 15-year buckets. At a 37% marginal tax rate, a high W-2 earner applying 100% bonus depreciation against that $125,000 sees roughly $46,250 in reduced tax liability in year one, assuming the property qualifies for active loss treatment under the STR loophole. The remaining 75% of the property value keeps depreciating over 27.5 years like any other residential rental.
Furniture and appliances: 100% bonus depreciation
Sofas, beds, dining sets, televisions, refrigerators, and washer/dryer units in a furnished rental are typically classified as 5-year property under MACRS. Once documented in an engineering-based cost segregation study, these assets qualify for 100% bonus depreciation in 2026, meaning the entire purchase or allocated basis is deductible the year the property is placed in service. Verdict: Buy the study before filing; the deduction is real and immediate when the asset class is correctly documented.
This is one of the biggest reasons furnished short-term rentals outperform unfurnished long-term rentals for tax planning. A long-term rental without furnishings has fewer 5-year and 7-year assets to reclassify, which shrinks the bonus depreciation pool.
Land improvements: 100% bonus depreciation
Driveways, parking pads, exterior lighting, fencing, and landscaping around a furnished rental are usually 15-year property. Under current law these also qualify for 100% bonus depreciation in 2026, separate from the furniture and appliances inside the unit. A hot tub, deck, or pool installed for guest use often falls into this category too, and each has its own classification nuance depending on function and permanence.
Verdict: Include these in the study scope; skipping exterior assets is a common way owners under-claim.
The building itself: 0% bonus depreciation
The structural shell, framing, roof, plumbing lines, and electrical systems tied to the building are 27.5-year residential real property. None of this qualifies for bonus depreciation, no matter how the property is furnished or operated. This portion keeps depreciating on the standard straight-line schedule for the life of the asset.
Verdict: Don't expect the building to accelerate; the accelerated deduction comes entirely from the reclassified components.
Why bonus depreciation amounts vary on furnished rentals
- Placed-in-service date. Only assets acquired and placed in service after January 19, 2025 get the 100% rate; earlier acquisitions may fall under the phased-out bonus depreciation schedule.
- Furnishing level. A fully furnished short-term rental has a larger share of 5-year and 7-year assets than a bare long-term rental.
- Property age and finishes. Newer or recently renovated properties often carry more reclassifiable components than older, unmodified units.
- Active participation. Claiming losses against W-2 income depends on meeting the material participation tests for the STR loophole, not on bonus depreciation itself.
- Documentation quality. An engineering-based study that itemizes each asset class holds up differently under IRS review than a rule-of-thumb estimate.
- State conformity. Some states don't fully conform to federal bonus depreciation rules, which changes the state-level benefit even when the federal deduction is unchanged.
Get your reclassification estimate
See what share of your furnished rental may qualify for 100% bonus depreciation.
Does bonus depreciation apply to a long-term rental with furniture?
Yes, bonus depreciation applies to a long-term rental with furniture the same way it does to a short-term rental, as long as the furniture and appliances are properly classified as 5-year or 7-year property. The difference isn't eligibility, it's scale: a furnished long-term rental usually has fewer reclassifiable assets than a fully equipped short-term rental, and losses from a long-term rental are passive by default unless you qualify for real estate professional status.
Is 100% bonus depreciation permanent under current law?
Yes, under current law. OBBBA restored the full 100% rate for property acquired and placed in service after January 19, 2025 with no scheduled phase-down or end date, reversing the phase-down that had brought the rate to 40% in 2025 under prior rules. Future legislation could still change the rate, so the acquisition and placed-in-service dates on your specific asset matter more than assumptions about what the rate "usually" is.
Do appliances qualify for bonus depreciation without a cost segregation study?
Appliances can technically qualify for bonus depreciation without a formal study if you separately track their cost basis and classify them correctly, but in practice most owners default to depreciating the entire property over 27.5 years because they never separated the components. A cost segregation study documents the classification with engineering detail, which is what supports the deduction if the IRS asks for backup later.
FAQ
What qualifies for bonus depreciation on a furnished rental property in 2026?
Furniture, appliances, and land improvements classified as 5-year, 7-year, or 15-year property qualify for 100% bonus depreciation in 2026 when acquired and placed in service after January 19, 2025. The building structure itself, at 27.5-year property, never qualifies.
How much of a furnished rental typically gets reclassified in a cost segregation study?
A common illustrative assumption is 25% of a property's value moving into shorter-life asset classes, though the actual share depends on how furnished and finished the property is. On a $500,000 property, 25% reclassified equals $125,000 eligible for accelerated treatment.
Is bonus depreciation the same as the short-term rental loophole?
No, bonus depreciation is a depreciation rate applied to qualifying assets, while the STR loophole is a set of material participation rules that let active short-term rental owners apply rental losses, including bonus depreciation losses, against W-2 income. You need both pieces working together to offset W-2 income with a furnished rental.
Does furniture bought after 2026 still qualify for 100% bonus depreciation?
Yes, furniture acquired and placed in service after January 19, 2025 qualifies for 100% bonus depreciation under current OBBBA rules, regardless of whether the purchase happens in 2026 or a later year, as long as the law isn't changed again.
Can a long-term rental with furniture use bonus depreciation the same way as an Airbnb?
Yes, the same 5-year and 7-year asset classifications apply to a long-term furnished rental, but the furnishing level is usually lighter, which shrinks the reclassified share compared with a fully equipped short-term rental.
How is bonus depreciation calculated on a furnished rental?
Bonus depreciation is calculated by applying the 100% rate to the depreciable basis of each qualifying asset class identified in a cost segregation study, not to the entire property. A $125,000 reclassified basis at 100% bonus depreciation produces a $125,000 first-year deduction before considering the taxpayer's bracket.
Do appliances need a cost segregation study to claim bonus depreciation?
Appliances don't legally require a study to qualify, but without one most owners lump appliance cost into the building's 27.5-year basis by default. An engineering-based study separates and documents each asset class so the bonus depreciation claim holds up under review.
One last thing
The part owners miss most often isn't the furniture, it's the exterior. A deck, driveway, or fence installed alongside a furnished rental is frequently 15-year property eligible for the same 100% bonus depreciation as the interior furnishings, and it gets skipped constantly because owners assume land improvements don't count. Reviewing the top tax write-offs for landlords alongside your furnishing invoices before your CPA files is the fastest way to catch what a quick DIY estimate misses.
