Can I depreciate furniture I bought before starting my Airbnb?

Yes. When you convert personal property to business use for your STR, you can begin depreciating it under IRC §167(a). The depreciable basis is the lower of the item's fair market value on the conversion date or its adjusted cost basis. You cannot use the original purchase price if the item has declined in value.

What is the basis for depreciating converted personal furniture?

The basis for depreciation is the lower of: (1) the fair market value (FMV) of the item on the date you convert it to rental use, or (2) your adjusted cost basis (original cost minus any depreciation already taken). For most household furniture, FMV at conversion will be lower than original cost because furniture depreciates in the real world.

How do I determine the fair market value of used furniture for my STR?

You can use several methods: check recent sold listings on Facebook Marketplace or Craigslist for comparable items, use valuation guides, or obtain a formal appraisal for high-value items. Document your methodology with screenshots or printouts dated near the conversion date. For lower-value items, a reasonable estimate with documentation is generally sufficient.

What MACRS recovery period applies to converted furniture?

Furniture and fixtures are 5-year MACRS property under asset class 00.11. Appliances are also 5-year MACRS property. Depreciation begins on the date you place the item in service in your STR — meaning the date it is available and ready for guest use.

April 6, 2026 · 7 min read

Can I Depreciate Furniture I Already Owned Before Starting My STR?

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Yes, you can depreciate furniture and appliances you already owned when you convert them to short-term rental use. Under IRC §167(a), the depreciable basis for converted personal property is the lower of its fair market value (FMV) or adjusted cost basis on the date of conversion—not the original purchase price.

The Conversion Rule: What the IRS Requires

When you move personal property into business use, the tax code treats that conversion date as the "placed in service" date for depreciation purposes. From that point forward, you can claim MACRS depreciation on the asset each year until it is fully depreciated, disposed of, or the rental activity ends.

The critical rule that trips up many hosts: you cannot use the original purchase price as your depreciable basis if the asset has declined in value. Furniture you paid $3,000 for five years ago may only be worth $900 today. Your depreciable basis is $900—the FMV at conversion—not $3,000.

Common Mistake

Using the original receipt price as the depreciation basis for personal furniture converted to rental use is one of the most common errors STR hosts make. The IRS requires you to use the lower of FMV or adjusted basis. For most household furniture that has been used for several years, FMV will be well below original cost.

Calculating Depreciable Basis for Converted Property

The formula is simple in concept:

Depreciable Basis = Lower of (FMV at Conversion Date) OR (Adjusted Cost Basis)

Adjusted cost basis means your original purchase price minus any depreciation you already claimed (which is $0 for personal use assets since you can't depreciate personal property). So for most personal-to-rental conversions, adjusted cost basis equals original purchase price.

Example: Living Room Sofa

5-Year MACRS

You purchased a sofa for $2,400 three years ago and move it into your new STR in April 2026.

Original cost: $2,400
FMV at conversion (researched via resale comps): $650
Adjusted cost basis: $2,400 (no prior depreciation)
Depreciable basis: Lower of $650 or $2,400 = $650
Annual depreciation (5-yr MACRS): ~$130/year

Example: Nearly-New Appliance

5-Year MACRS

You bought a washer/dryer set for $1,800 six months ago. You convert it to STR use in April 2026 when the FMV is approximately $1,400.

Original cost: $1,800
FMV at conversion: $1,400
Depreciable basis: Lower of $1,400 or $1,800 = $1,400
Annual depreciation (5-yr MACRS, Year 1): ~$280

How to Determine Fair Market Value

FMV is what a willing buyer would pay a willing seller with no compulsion on either side. For used furniture and appliances, several methods work:

Facebook Marketplace / Craigslist: Search for comparable items in your area. Look at recently sold listings if available. Screenshot 3–5 comparables and save them with the date.
eBay completed listings: Filter for sold items to see what comparable pieces actually sold for (not just listed at).
Resale shops: Check local consignment or secondhand furniture stores for pricing on similar items.
Formal appraisal: For high-value items (antiques, artwork, premium furniture), hire a licensed appraiser. Required for charitable contributions of property worth over $5,000, but useful here for documentation too.

Documentation Tip

Create a simple spreadsheet at the time of conversion listing each item, original cost, conversion date, source of FMV estimate, and the FMV you're using. Save screenshots of your comparable research. This contemporaneous documentation is your audit defense if the IRS ever questions your basis. Recreating this two years later is much harder.

MACRS Recovery Period for Common Converted Assets

Asset Type	MACRS Life	Year 1 Rate (Half-Year Convention)	Notes
Sofas, chairs, tables	5 years	20%	Asset class 00.11
Beds, dressers, nightstands	5 years	20%	Asset class 00.11
Refrigerator, washer, dryer	5 years	20%	Asset class 00.12
TVs, electronics	5 years	20%	Asset class 00.12
Rugs, carpets	5 years	20%	Asset class 00.3
Lamps, décor	5 years	20%	Treated as furniture

Can You Use Bonus Depreciation or Section 179 on Converted Property?

This is where converted personal property has a significant advantage over new purchases. Both bonus depreciation and Section 179 are available for converted personal property, subject to the same rules that apply to new purchases.

For bonus depreciation, the property must be "original use" to you as a business asset—which it is, because you're converting it from personal to business use for the first time. This means you can elect 100% bonus depreciation on converted furniture in 2026, subject to having sufficient business income (for Section 179) or being willing to create a loss (for bonus depreciation).

Tax Savings Opportunity

If you convert $8,000 worth of personal furniture (at FMV) into your new STR, and you elect 100% bonus depreciation, you deduct the full $8,000 in Year 1 instead of spreading it over 5 years. At a 30% combined rate, that's a $2,400 accelerated tax benefit compared to waiting for standard MACRS.

Documenting the Conversion Date

The conversion date is the date the property is placed in service in your rental—meaning it's ready and available for guest use. Document this with:

Photos of the property on the date it was ready for guests, with timestamps
Your first listing date on Airbnb, VRBO, or your booking platform
Your first confirmed booking or check-in date
A written note in your records stating the date and the assets converted

If you convert some furniture before the property is fully operational, use the date each item was placed in its location and available for use—not the date you bought it years ago.

Track Converted Assets Alongside New Purchases

DeductFlow tracks your full asset list—whether purchased new or converted from personal use—with conversion dates, FMV documentation notes, and depreciation schedules all in one place.

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Disclaimer

This article is for informational purposes and does not constitute tax, legal, or financial advice. Tax rules vary based on your specific situation, filing status, entity structure, and jurisdiction. Always consult a qualified CPA or tax professional for guidance on your specific tax situation. IRS rules and thresholds are subject to change—verify current requirements at irs.gov before filing.