Can I use Section 179 on furniture for my short-term rental?

Yes. Furniture, appliances, and electronics used in your STR are qualifying IRC §179 property. You can deduct their full cost in the year placed in service, up to the $1,160,000 limit in 2026, provided the deduction does not create a net loss from your STR activity.

What is the difference between Section 179 and bonus depreciation for STR furniture?

Both allow immediate full expensing of qualifying property, but Section 179 cannot create a net loss while bonus depreciation can. Bonus depreciation is applied automatically (unless you opt out), while Section 179 is elected on Form 4562. Many STR owners use bonus depreciation first and Section 179 as a secondary tool.

Does Section 179 apply to real property like the STR building itself?

No. The STR building structure (27.5-year residential rental property or 39-year commercial property) does not qualify for Section 179. Section 179 applies to personal property such as furniture, appliances, and electronics, as well as certain qualified improvement property.

April 6, 2026 · 8 min read

Section 179 for Short-Term Rental Furniture and Appliances

Q: What is the Section 179 limit for 2026?

The Section 179 deduction limit is $1,160,000 in 2026, with a phase-out beginning at $2,890,000 of qualifying property placed in service during the year. The limit is reduced dollar-for-dollar above the phase-out threshold.

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Under IRC §179, short-term rental owners can deduct the full purchase price of qualifying personal property—furniture, appliances, and electronics—in the year those items are placed in service, rather than depreciating them over five or seven years. In 2026, the Section 179 deduction limit is $1,160,000, with a phase-out starting at $2,890,000 of qualifying property placed in service during the year.

What Section 179 Is and How It Works for STRs

Section 179 of the Internal Revenue Code allows businesses to expense the cost of qualifying property immediately rather than recover it through multi-year depreciation. For short-term rental operators, this means a sofa set, refrigerator, or smart TV you purchase and place in service before December 31 can generate a full deduction on this year's return—no waiting five to seven years under the standard MACRS schedule.

The mechanics are straightforward: you elect Section 179 on Form 4562 and report the deduction on your Schedule C (or Schedule E if applicable). The election is made per asset, so you can choose to expense some items under Section 179 and depreciate others under standard MACRS or claim bonus depreciation.

Real Dollar Impact

You furnish a new STR with $28,000 of furniture and appliances. Under standard 5-year MACRS, your Year 1 deduction is roughly $5,600 (20% of cost). Under Section 179, you deduct the entire $28,000 in Year 1. At a 32% combined federal and self-employment rate, that's approximately $7,168 in additional tax savings in the current year alone—cash you can reinvest in your property.

What Qualifies for Section 179 in a Short-Term Rental

The IRS generally classifies STR personal property as 5-year MACRS property (furniture, appliances, carpets) or 7-year MACRS property (certain equipment). All of these categories qualify for Section 179 expensing. The building structure itself—classified as 27.5-year residential rental property or 39-year commercial property—does not qualify.

5-Year MACRS Property (Qualifies for §179)

MACRS Asset Class 00.11 / 00.12

These are the most common Section 179 purchases for STR operators.

Sofas & chairs Beds & bed frames Dining tables Dressers & nightstands Refrigerators Washers & dryers Dishwashers Microwaves Coffee makers Carpets & rugs

Electronics & Tech Equipment (Qualifies for §179)

MACRS Asset Class 00.12

Electronics used exclusively in the rental activity qualify. Mixed personal/business use requires proration.

Smart TVs Streaming devices Wi-Fi routers Smart locks Security cameras Noise monitors Tablets (guest use)

Example: A 65" smart TV ($1,200) + smart lock system ($350) + security cameras ($480) = $2,030. All qualify for immediate Section 179 expensing.

The Critical Rule: Section 179 Cannot Create a Loss

Here is the key distinction between Section 179 and bonus depreciation. Section 179 deductions cannot exceed your taxable income from the business activity. If your STR generated $20,000 of net income before depreciation and you have $25,000 of Section 179 eligible property, you can only deduct $20,000 under Section 179 this year. The unused $5,000 carries forward to future years.

Bonus depreciation, by contrast, has no income limitation—it can create a net loss that offsets other income (subject to passive activity rules). This is why many tax advisors recommend using bonus depreciation first for large purchases and reserving Section 179 for situations where you want precise control over your deductible amount.

No-Loss Rule

Section 179 is limited to your business taxable income. If you elect more Section 179 than your STR income allows, the excess carries forward—it is not lost. However, you cannot use carried-forward Section 179 to create a loss in a future year either. Plan your elections carefully with your CPA.

Section 179 vs. Bonus Depreciation: Side-by-Side

Feature	Section 179	Bonus Depreciation
2026 deduction rate	100% of cost	100% of cost
Can create a loss?	No	Yes
Applies to used property?	Yes	Yes (new-to-you)
Applies to building structure?	No	No
Election required?	Yes (Form 4562)	Automatic (opt-out to decline)
Deduction limit	$1,160,000 (2026)	No cap
Phase-out threshold	$2,890,000	None

The Phase-Out Threshold

If you place more than $2,890,000 of qualifying property in service during 2026, your Section 179 limit begins to phase out dollar-for-dollar. For most individual STR operators, this threshold is not a concern—it primarily affects large commercial operators buying significant amounts of equipment in a single year.

Pro Tip

Property must be placed in service—meaning ready and available for use in the rental—by December 31 of the tax year. Ordering furniture in December but receiving it in January of the following year does not qualify for the current year's Section 179 deduction. Timing your purchases and deliveries matters.

MACRS Asset Classes for Common STR Property

Asset Type	MACRS Class	Recovery Period	§179 Eligible?
Furniture & fixtures	00.11	7 years	Yes
Appliances (non-built-in)	00.12	5 years	Yes
Carpets & floor coverings	00.3	5 years	Yes
Electronics & computers	00.12	5 years	Yes
Land improvements	00.3	15 years	Yes
Residential rental building	N/A	27.5 years	No
Commercial building	N/A	39 years	No

Practical Examples with Dollar Amounts

Example 1: Fully Furnishing a New STR

Full Section 179 Election

A host purchases a cabin and spends $42,000 furnishing it in 2026. The STR generates $55,000 of gross income and $18,000 of net income before depreciation.

Section 179 election: $42,000 expensed immediately. Net income after Section 179: $18,000 − $42,000 = −$24,000. But Section 179 cannot create a loss—deduction is capped at $18,000. The remaining $24,000 carries forward to 2027. Alternatively, the host can elect bonus depreciation on the excess to generate the loss.

Example 2: Targeted Purchase for Income Offset

Strategic §179 Use

An STR with $9,500 of net income before depreciation. The host buys a new washer/dryer ($1,800) and a new sectional sofa ($3,200) in Q4.

Result: $5,000 of Section 179 reduces taxable STR income to $4,500. No loss created, no carryforward needed. Clean and efficient use of the election.

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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.