Worked examples

Four real STR studies, line by line.

Four different price points, four different property types, four different reclassification outcomes. Names are changed but the math is real.

Luxury STR

$650,000 Smoky Mountains cabin

Gatlinburg, TN · 4BR · hot tub · game room · 3.8‑day avg stay
Purchase price$650,000
Less land (18%)−$117,000
Depreciable basis$533,000
5‑yr property (furniture, finishes, hot tub)$132,800  ·  24.9%
15‑yr land improvements (deck, driveway, landscaping)$58,900  ·  11.1%
39/27.5‑yr building shell$341,300  ·  64.0%
Year‑1 deduction
$154,200
36% reclass
Study tier: Luxury STR
Furnished STR

$480,000 Destin beach house

Destin, FL · 3BR · pool · beach access · 5.1‑day avg stay
Purchase price$480,000
Less land (22%)−$105,600
Depreciable basis$374,400
5‑yr property (furnishings, pool equipment)$71,100  ·  19.0%
15‑yr land improvements (pool, fencing, palms)$35,600  ·  9.5%
27.5‑yr building shell$267,700  ·  71.5%
Year‑1 deduction
$89,400
28.5% reclass
Study tier: Furnished STR
Furnished STR

$375,000 Nashville condo

The Gulch, Nashville · 2BR · rooftop pool (HOA) · 2.9‑day avg stay
Purchase price$375,000
Less land allocation (10%, condo)−$37,500
Depreciable basis$337,500
5‑yr property (furniture, fixtures, appliances)$57,400  ·  17.0%
15‑yr land improvements (limited — HOA owned)$8,400  ·  2.5%
27.5‑yr building shell$271,700  ·  80.5%
Year‑1 deduction
$59,300
19.5% reclass
Study tier: Furnished STR
Standard STR

$185,000 Cleveland duplex

Ohio City, Cleveland · 2 units · 1 STR + 1 mid‑term · 6.4‑day avg stay (STR unit)
Purchase price$185,000
Less land (25%)−$46,250
Depreciable basis$138,750
5‑yr property (furniture, simple finishes)$20,100  ·  14.5%
15‑yr land improvements (fence, driveway)$6,500  ·  4.7%
27.5‑yr building shell$112,150  ·  80.8%
Year‑1 deduction
$23,800
19.2% reclass
Study tier: Standard STR
What drives the rate

Why the Smoky cabin hits 36% and the Cleveland duplex hits 19%.

Reclassification rate isn't about luxury — it's about what mix of components sits inside the purchase price. Here's how four factors move the needle.

Driver Pushes rate ↑ Pushes rate ↓ Effect on a $500K basis
Furnishings & kitchen kit Fully stocked, replaced on turnover cycle Minimal — tenant brings own ±$35K–$55K
Outdoor improvements Pool, hot tub, fire pit, decking, landscaping Condo or townhouse w/ HOA common areas ±$25K–$60K
Finish level Custom millwork, tile, decorative lighting Builder‑grade, rental‑spec ±$15K–$35K
Site work Long driveway, fencing, retaining walls Shared lot or minimal site features ±$10K–$30K

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