Bonus Depreciation for Furnishings: What Hosts Need to Know in 2026
Good news for hosts planning a refresh: 100% federal bonus depreciation is back for eligible property acquired and placed in service after January 19, 2025. That can include many of the beds, sofas, tables, appliances, electronics, and other furnishings you purchase for a short-term rental.
Bonus depreciation lets a business deduct the qualifying cost in the year an asset is placed in service instead of spreading the deduction over its regular depreciation schedule. The 2025 tax law made the 100% allowance under Section 168(k) permanent, replacing the phase-down that would have left a 20% deduction in 2026.
How bonus depreciation works for short-term rental furnishings
1. Start with an eligible asset. Qualified property generally includes tangible depreciable property with a MACRS recovery period of 20 years or less. Furniture and fixtures commonly fall into five- or seven-year classes, so they may qualify. The building itself generally does not.
2. Watch both the purchase and placed-in-service dates. The permanent 100% allowance generally applies when eligible property is acquired and placed in service after January 19, 2025. “Placed in service” means the item is ready and available for use—not simply ordered or paid for.
3. New is not the only option. Certain used property can qualify when it was not previously used by you or a related party and the purchase meets the tax code’s acquisition rules. That matters when you source vintage pieces or purchase furnishings with an existing rental.
4. Separate furnishings from real property. Furniture, fixtures, appliances, and equipment may have shorter recovery periods than the home. Structural improvements and the building follow different rules. A cost-segregation study may identify shorter-lived components, but it should be performed and reviewed by qualified professionals.
5. Keep the receipt trail. Save invoices, delivery and installation charges, the business-use percentage, and the date each item became ready for guests. Those records support the asset’s tax basis and placed-in-service date.
Bonus depreciation is not the same as Section 179
Section 179 is another first-year expensing option, but it has annual dollar limits, a business-income limitation, and its own eligibility rules. Bonus depreciation can create or increase a federal tax loss; whether that loss can offset other income depends on passive-activity, at-risk, material-participation, and short-term-rental rules. Your tax professional can determine which approach fits your return.
What hosts should check before claiming it
The federal deduction is only one part of the picture. States do not all conform to federal bonus-depreciation rules, and some require an add-back or a different depreciation schedule. Personal use can also reduce the deductible business portion of an item. Confirm your state treatment, rental activity classification, and business-use records before filing.
The IRS explains the restored 100% allowance in its One Big Beautiful Bill guidance and provides detailed interim rules in Notice 2026-11. Tax rules are specific to the taxpayer and property, so bring your furnishing plan and records to a qualified tax professional.
The bottom line
In 2026, eligible furnishings can once again qualify for a 100% federal bonus-depreciation deduction. That makes a well-timed property refresh potentially more valuable—but eligibility, timing, business use, state conformity, and loss limitations all matter. Design the stay your guests will love, keep clean records, and let your tax advisor confirm the deduction.
Read the IRS overview of the 2025 tax law and IRS Notice 2026-11.