STR Placed-in-Service Date: Year-End Readiness and Evidence
By AE Tax Advisors · Published 2026-08-11 · Updated November 8, 2026.
Depreciation begins when property is ready and available for its assigned use. Closing, paying a contractor or ordering furniture does not by itself establish a short-term rental's placed-in-service date. The first guest's arrival is not necessarily the date either.
Build a timeline from actual conditions
Record acquisition, access, renovation completion, utilities, installation, required approvals and rental availability. Determine what was needed for the property's intended operation and when those conditions were satisfied.
A February first booking does not automatically rule out December readiness. Conversely, a December listing is not enough if the property could not actually accommodate guests. Reconcile the advertising with the physical and legal facts.
Separate the building from later additions
Furniture, appliances and new amenities can have their own service dates. An item delivered and installed after year end should not be treated as available earlier merely because it was paid for in December.
Classify each asset and review its eligibility for bonus depreciation or another treatment. Not every furnishing is automatically the same property class, and readiness does not establish that the owner can currently deduct the resulting loss.
Document required approvals
Keep permits, certificates and other required authorizations relevant to lawful operation. Local requirements differ. An incomplete approval process may affect the facts; a generic calendar checklist cannot replace that analysis.
Preserve evidence of availability
- Dated photos and completion records.
- Delivery and installation receipts.
- Utilities and necessary approvals.
- Listing history, open calendar and booking records.
- Explanation of any remaining work and whether it prevented use.
The records should agree. A listing that says the property is ready while construction records show it was unusable requires resolution before filing.
Evaluate the deduction separately
After establishing service dates, calculate depreciation with the relevant basis, class, convention and elections. For losses, review participation, personal use, at-risk amounts and the other applicable limitations.
For example, a finished rental genuinely available in late December may have a December service date even if its first reservation is in January. An unavailable property awaiting essential work cannot use the closing date as a substitute. These are fact patterns, not automatic outcomes from a single document.
If readiness occurs after year end
Use the supported service date. Do not backdate records to obtain an earlier deduction. A different property's possible Form 3115 adjustment must meet its own method-change requirements and is not an automatic substitute for the planned purchase.
Request a year-end readiness review with the timeline and evidence before relying on the deduction in a tax projection.
Frequently Asked Questions
Must my first guest arrive before December 31?
Not necessarily. The property must actually be ready and available for its assigned use.
Does paying for furniture establish its service date?
No. Readiness and availability, including necessary delivery and installation, determine the relevant date.
Does a listing alone prove the date?
No. Reconcile it with physical readiness and required approvals.
Sources and review notes
Reviewed November 8, 2026 by AE Tax Advisors. Examples are illustrative; apply the rules to the relevant tax year and records. See our editorial policy.