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Short-Term Rental Material Participation Playbook for 2025

August 28, 2025

Scott Sage
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Scott Sage

ARTICLE SUMMARY

Big tax perks are back for short-term rental (STR) owners in 2025, but only if you qualify as a material participant. This guide breaks down what material participation means, how to pass one of the IRS’s seven tests, and what STR hosts need to track to unlock nonpassive income treatment and maximize deductions.

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Airbnb Host Tips
Scott Sage

Scott Sage

Senior Vice President, Marketing & Customer Experience   

Scott is an Airbnb Superhost and industry pro, having founded Home Base BnBs—a short term rental management company that scaled to 200+ units. Scott combines his experience and passion for hosting to empower AirDNA customers' success. When he's not thinking about STRs, he is hiking, playing basketball, or playing pickleball.