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STR year-end operations

The STR CPA Handoff: What to Give Your CPA for a Defensible §469 File

Give your CPA two files in January: a Schedule E backup reconciled against bank data, and a §469 qualification file with material-participation hours, average-stay math, and personal-use days. §469 (the passive-activity-loss rules) treats rental losses as passive by default; the qualification file documents which §1.469-5T material-participation test supports the non-passive position. The money-side file lands by late January once 1099s arrive; the §469 qualification file can follow by Feb 1. A clean handoff supports taxpayer-safe defaults: it hands the preparer what they need to sign the return without rebuilding records from memory.

Fifth article in the Nov-Dec year-end sequence. Follows the year-end tax checklist and the §469 MP hour self-audit: once the record is counted, this guide walks the handoff.

The 60-second answer

Bottom line: the CPA needs a two-file package per activity. §469 (the passive-activity-loss rules) treats rental losses as passive by default; the qualification file documents which path takes the activity out of per se rental (default treatment as rental). The money-side file is a Schedule E backup reconciled against bank statements. The §469 qualification file carries material-participation (MP) hours under §1.469-5T (the material-participation tests regulation), average-stay by day count under §1.469-1T(e)(3)(ii)(A) (the 7-day average-stay rule), and §280A(d) personal-use days (the 14-day/10% personal-use ceiling) against the greater-of-14-days-or-10%-of-rental-days threshold. A one-page cover note states which §469 path you are claiming per activity, and flags any reconstructed segments honestly.

  • Two files, one note. Money-side Schedule E backup, §469 qualification file (hours, stays, personal-use, mileage with purpose under §274(d) travel/mileage substantiation), one cover note stating the §469 path.
  • Calendar. Money-side records by late January once W-2 and 1099s land. §469 qualification file by Feb 1. The qualification file is a planning document, not a tax form.
  • CPA questions that reveal gaps. Can you prove you were there? What was the average-customer stay by day count? Are the hours contemporaneous or reconstructed? Did any other individual log more hours than you?
  • Red flags your CPA will push back on. Reconstructed logs with no corroboration. Mileage totals with no per-trip purpose. Personal-use days reported as repair days without a scope-of-work note. Hour counts that exceed the plausible workload.
  • If your CPA says "I don't do STR returns", thank them and interview CPAs who do. A firm that asks for a §469 qualification file before quoting the engagement is the kind of fit worth considering for a §469 non-passive position.

Not tax advice; general framework. Material participation and §280A classification are fact-specific IRS determinations; your CPA has the call on your specific facts.

What your CPA actually needs

General information, not tax advice; confirm with your CPA.

A CPA preparing an STR return with a §469 non-passive position needs enough record to reconstruct the Schedule E lines and enough record to defend the non-passive claim if the IRS asks. Those are two separate records in practice, even when one tool produces both. The money-side record is bank-anchored: platform payouts, direct-booking receipts, operating expenses tied to invoices or receipts, mortgage interest from Form 1098, property-tax bills, insurance premium statements, HOA ledgers, utility statements, depreciation schedules carried forward from the prior year plus any new placed-in-service assets. The §469 qualification record is activity-anchored: material-participation (MP) hours per activity, average-customer stay by day count per activity, personal-use days per property under §280A(d), and mileage logged with per-entry stated business purpose under §274(d) substantiation.

Both records matter. Clean Schedule E lines without a §469 qualification record means the preparer either declines the non-passive position (losses suspend under §469(b) and release on disposition under §469(g)(1)) or signs a return without the documentation needed on examination. A §469 qualification record without clean Schedule E lines means the preparer rebuilds the money side themselves at the engagement rate, which is expensive and often incomplete. The point of the handoff is to deliver both.

The two-file structure

General information, not tax advice; confirm with your CPA.

File 1: Income and expenses

Per-property Schedule E backup, reconciled against bank statements. Platform payouts (Airbnb, VRBO, Booking.com) with the 2026 1099-K showing $20,000-and-200-transaction threshold. Cleaning, maintenance, utilities, insurance, mortgage interest from Form 1098, property tax, HOA, supplies. Depreciation schedule carried forward plus any new placed-in-service assets with invoice and placed-in-service date. The output is a Schedule E line-mapped CSV per property, plus the source documents.

File 2: §469 qualification

Three record axes per activity: §469 material-participation hours under §1.469-5T(a)(1) 500-hour and (a)(3) 100-hour tests; §469 average-stay by day count under §1.469-1T(e)(3)(ii)(A) (the 7-day test that pulls the activity out of per se rental); §280A(d) personal-use days against the greater-of-14-days-or-10%-of-rental-days ceiling. Plus mileage with per-entry stated business purpose under §274(d). Plus a signed year-end summary stating hour totals and the §469 path.

The cover note is a single page across all properties: which §469 path per activity ((a)(1) 500 hours, (a)(3) 100 hours with no other individual participating more, §1.469-4 grouping across multiple STRs, or §469(b) suspension), the average-stay result for the 7-day test, the personal-use day count, and a one-line note on any reconstructed segments. The CPA uses this as the engagement roadmap; the raw records back it up.

Step 1

Close the books by Dec 31

General information, not tax advice; confirm with your CPA.

Reconcile every 2026 property-level transaction against bank and card statements through the December month-end close. The per-property Schedule E totals your CPA will typically reconcile include gross rents received, cleaning, maintenance, utilities, insurance, mortgage interest from Form 1098, property tax, HOA, supplies, management fees, and depreciation. If you run a bookkeeping tool (Baselane, Stessa, QuickBooks, REI Hub, or similar), export a per-property profit-and-loss and a Schedule E line-mapped report once the December statement is in (features based on publicly available information as of 2026-09-09). If you run on a spreadsheet, reconcile against statements by hand.

Three line items worth confirming with your CPA at close: how cleaning fees collected from guests and passed through to cleaners should flow on Schedule E (gross vs net can affect the picture); how platform-collected occupancy tax is reported (often a pass-through rather than income); and the treatment of mortgage principal versus the interest reported on Form 1098. Your CPA has the call on your specific facts. A clean month-end close in December avoids a mid-engagement scramble to re-pull statements in February.

Step 2

Finalize material-participation hours

General information, not tax advice; confirm with your CPA.

Run the §469 material-participation (MP) self-audit if you have not already. Hours per activity are counted against §1.469-5T(a)(1) 500-hour and (a)(3) 100-hour tests. Investor-type hours under §1.469-5T(f)(2)(ii) (financial-statement review, broad strategic planning, tax-guide reading) are tracked separately from qualifying hours. Hours that fail the §1.469-5T(f)(2)(i) two-part anti-abuse carve-out (work not of a type customarily performed by owners, where one main reason for doing it was to avoid the passive-loss limit) are tracked separately. Travel hours without stated business purpose under §274(d) do not count as qualifying hours. Spouse hours aggregate under §469(h)(5), regardless of filing status.

Under the (a)(3) 100-hour path, no other individual (cleaner, co-host, property manager, handyman) can have logged more hours than you in the activity; the test closes if any one of them did. The §469 MP hour self-audit guide walks the logged-hour worksheet in full. The CPA typically relies on the number you provide; they do not re-run the count.

Step 3

Run the §280A personal-use audit

General information, not tax advice; confirm with your CPA.

A dated personal-use day log per property supports the §280A(d)(1) analysis. The §280A(d)(1) ceiling is the greater of 14 days or 10% of fair-rental days. Under §280A(d), days used by a family member below fair rent are generally personal days; days where the predominant purpose is repair or maintenance are generally not; days used under a reciprocal-use arrangement are generally personal. The classification is fact-specific and your CPA has the call. If §280A personal use exceeds the ceiling, §280A limits deductible expenses and the §469 non-passive position narrows regardless of hours logged.

The log carries, for each personal day: the date, who used the property, the nature of the use (owner stay, family use, repair trip, reciprocal exchange), and any rent paid. For repair-day claims, a scope-of-work note with the trip supports the classification, because a repair day without a scope note is a §280A audit trigger. The personal-use days log template covers the format.

Step 4

Assemble the §469 qualification file

General information, not tax advice; confirm with your CPA.

One file per activity. Four pieces per file:

  1. Material-participation hour log. Dated entries with activity type, hours, and a short description. Honest hours separated from reconstructed segments if any.
  2. Average-stay record. Per-reservation guest check-in and check-out dates, with a year-end weighted average by day count. If the average is 7 days or less, §1.469-1T(e)(3)(ii)(A) pulls the activity out of per se rental.
  3. §280A personal-use day log. Dated entries with nature of use (owner stay, family use, repair, reciprocal), rent paid if any, and scope-of-work notes for repair-day claims.
  4. Mileage log with purpose per entry. §274(d) substantiation: per-entry date, miles, stated business purpose. Miles without purpose flagged separately, not totaled into the deduction.

A one-page year-end summary (hour totals per activity, average-stay result by property, personal-use day count, mileage total, and the §469 test path identified) is among the records your CPA will typically request alongside the raw logs. You sign the summary; the raw logs stay in your files for retention under §6001. The how to prove material participation to the IRS guide covers the evidence-strength pyramid behind each entry type.

Step 5

Package both files with a cover note

General information, not tax advice; confirm with your CPA.

Two files per property plus one cover note across the properties. The cover note is a single page. State the §469 position per activity: (a)(1) 500 hours, (a)(3) 100 hours with no other individual participating more, §1.469-4 grouping across multiple STRs, or §469(b) suspension because no path was open this year. State the average-stay result for each activity against the 7-day test. State the §280A personal-use count against the ceiling. Note any reconstructed segments honestly: segments logged in real time versus segments reconstructed from calendar, platform messages, bank transactions, or email.

A good cover note is the preparer's engagement roadmap. It takes 20 minutes to write and saves hours of back-and-forth. A missing cover note means the preparer either skims the files and misses the §469 position, or runs the engagement at the pace of forensic reconstruction. The material-participation log template includes a cover-note section matched to this handoff format.

Step 6

Send on the January calendar

General information, not tax advice; confirm with your CPA.

Different pieces of the file land at different times. The money-side records cluster around 1099 arrival: 1099-K from platforms (the 2026 $20,000-and-200-transaction threshold restored post-OBBBA) by Jan 31; 1099-NEC from vendors paid $600 or more in trade or business by Jan 31; 1099-INT from banks by Jan 31. Brokerage consolidated 1099 (1099-B, 1099-DIV) typically arrives by Feb 15 and is routinely extended to mid-March, so brokerage statements are not expected in January. W-2 by Jan 31. Mortgage-interest Form 1098 by Jan 31 under Reg. §1.6050H-2 (many lenders earlier). Property-tax bills vary by jurisdiction. Insurance premium statements typically by mid-January.

Depreciation schedules from the prior year carry over automatically if the CPA kept the engagement file. New placed-in-service assets from 2026 need the invoice plus the placed-in-service date, which is a year-end timing call covered separately. The §469 qualification file can land with the handoff packet by Feb 1; it is a planning document, not a tax form, so earlier is better but not time-pressured. Many preparers appreciate seeing the qualification file first so they can scope the engagement before income forms arrive.

Step 7

Respond to the CPA's record-gap questions

General information, not tax advice; confirm with your CPA.

A CPA familiar with the STR §469 position will ask follow-up questions after reading the files. The questions reveal where the record needs supplement before the return is signed. The six questions below are the ones a well-matched preparer asks as a matter of course:

  1. Can you prove you were there? Contemporaneous logs, calendar entries, platform messages timestamped on the dates in question. The answer separates contemporaneous records from reconstructed ones.
  2. What was the average-customer stay by day count? If above 7 days, §1.469-1T(e)(3)(ii)(A) pulls the activity back into per se rental under §469(c)(2) and the loophole closes.
  3. How did you avoid the §1.469-5T(f)(2)(ii) investor-activity carve-out? Which hours are hands-on operations versus portfolio-level thinking.
  4. Are the hours contemporaneous or reconstructed? If reconstructed, from which corroborating sources. §1.469-5T(f)(4) accepts "reasonable means" but reconstruction weakens credibility on examination.
  5. Do you have mileage with purpose per entry? §274(d) requires substantiation. Mileage computed as miles times rate with no per-trip purpose is the pattern a CPA will push back on.
  6. Did any other individual log more hours than you in the activity? If yes, the (a)(3) 100-hour path is closed; the question is whether (a)(1) 500 hours is in reach or §469(b) suspension applies.

Answer honestly. A CPA who signs a return without pushing on these is doing you no favors. The IRS has three years for a standard audit window, longer if §6501(e) substantial-omission applies. Fabricating a response to clear a question is a §6662 accuracy-related-penalty risk and a §1.469-5T(f)(4) credibility risk at the examination stage.

Red flags your CPA will push back on

General information, not tax advice; confirm with your CPA.

Reconstructed log, no corroboration

Every entry in the same handwriting, same color, same month. No corroborating platform messages, calendar entries, or bank transactions on the dates claimed. §1.469-5T(f)(4) accepts "any reasonable means" of proof, but reconstruction without corroborating sources is the thinnest version of that argument.

Average-stay just under 7

An average-customer stay reported as 6.8 or 6.9 days that depends on counting a single long stay as several short ones, or on excluding specific bookings. The 7-day test under §1.469-1T(e)(3)(ii)(A) is bright-line; the calculation that reaches it has to be defensible on the booking record.

Repair days without a scope note

Personal-use days reclassified as repair days with no scope-of-work record. A trip that was really a family stay with "fixed a leaky faucet" tacked on is a §280A audit flag. Keep a scope note on every repair-trip claim: what was done, how long it took, invoices or receipts.

Mileage as miles times rate

A single mileage total computed as miles times the standard rate with no per-trip date, destination, or business purpose. §274(d) requires per-entry substantiation, not aggregated totals. Tools that output a single mileage number without per-entry support invite pushback.

Hour count exceeds the workload

A single-property solo host logging 900 hours (over 17 per week average, year-round) invites a §1.469-5T(f)(4) credibility conversation. The hour count has to be plausible on the operating workload. A number that is not plausible gets re-examined even without an audit.

Investor hours smuggled into MP

"Reading tax guides," "researching the STR market," and "planning portfolio allocation" claimed as material-participation hours. §1.469-5T(f)(2)(ii) carves these out as investor activity. A clean file keeps them in a separate log for other purposes if useful; it does not count them toward §469.

A preparer who pushes back on these red flags is doing the work. The alternative is a return that reads clean but does not stand up to examination. The red-flag list is also the self-check you can run before you send the files: if any pattern applies, fix it before the handoff rather than after.

When your CPA says "I don't do STR returns"

General information, not tax advice; interview before engaging.

Thank them for the honesty. A general-practice CPA who declines STR work is doing you a favor; the alternative is a preparer who takes on §469 non-passive returns they cannot substantiate on examination. Look for a replacement who handles STR work as a regular part of their practice. The interview questions below separate the fit.

Signals of fit

  • Uses the terms material participation, 7-day average-stay under §1.469-1T(e)(3)(ii)(A), and §280A personal-use ceiling without prompting.
  • Asks for a §469 qualification file before quoting the engagement.
  • Walks you through the (a)(1), (a)(3), §1.469-4 grouping, and §469(b) suspension paths without reaching for a reference.
  • Has a retention policy for the qualification file.
  • Knows the §469(c)(7) rental real-estate professional path does not apply to STRs under the 7-day exception.

Signals to walk away

  • Quote comes before any records are seen.
  • Firm pitches "maximum deduction" without asking what the hour log looks like.
  • No retention policy for the §469 qualification file.
  • Treats the §469 non-passive position as automatic once Schedule E losses exist.
  • Does not know whether §469(c)(7) applies to STRs on a 7-day activity.

Where to look: STR-focused CPAs often advertise through forums (BiggerPockets, STR-specific communities), investor-group referrals, and specialty-firm directories. A short interview call (30 minutes) is a reasonable ask before engaging; firms that treat STR as a regular segment of their practice treat the interview as standard client intake.

What Field Ledger exports

General information, not tax advice; confirm with your CPA.

Field Ledger produces per-property CSV exports covering the three record axes: §469 material-participation hours against the §1.469-5T(a)(1) 500-hour and (a)(3) 100-hour markers, with Reached / Below markers at each threshold; §469 average-stay by day count against the §1.469-1T(e)(3)(ii)(A) 7-day test; and §280A(d) personal-use days against the greater-of-14-days-or-10%-of-rental-days ceiling. Mileage is reported with per-entry date, destination, miles, and stated business purpose under §274(d); mileage entries that lack a stated purpose are flagged separately, not totaled into the deduction.

The Schedule E CSV carries operating subtotals mapped to Schedule E lines with MACRS class-life notes and a de-minimis flag at the $2,500 threshold. Personal-use days flow into the Schedule E CSV alongside the operating subtotals, so the money-side file reflects the §280A overlap directly. Investor-type work is tagged at capture and flagged separately rather than totaled with qualifying hours under the §1.469-5T(f)(2)(ii) carve-out. Participant-hour comparisons take the maximum other-participant bucket, which keeps multi-vendor properties from over-crediting against the (a)(3) "no other individual" test. Plain-English capture (where enabled on your plan) assembles typed-draft entries you review and confirm before each one saves, which keeps taxpayer-safe defaults in place.

The exports go to the CPA with the cover note. The full capture history stays in your account for §6001 retention. The CPA attaches summary numbers to the return and keeps the raw files in their engagement folder.

Hand your CPA a defensible §469 file this January

Field Ledger's 714-day trial is no-credit-card. Enter a week of records, see your hours, stays, and personal-use days measured against each threshold, and decide whether the three-record-axes CSV export fits your handoff before the engagement starts. A §469 qualification file documents, per activity, the material-participation hours against §1.469-5T, the average-stay against the 7-day test, and §280A personal-use days against the ceiling; Field Ledger structures the capture around those three record axes.

  • §469 material-participation hours, 7-day average-stay, and §280A personal-use days in one tool
  • Year-end summary CSV with the inputs for your cover note; you write and sign the summary yourself
  • Mileage with §274(d) substantiation; miles without a stated purpose flagged, not totaled
  • Per-property Schedule E CSV with MACRS and de-minimis notes
  • Plain-English capture (where enabled on your plan); you review and confirm every typed-draft entry before it saves
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Frequently asked questions

What is a CPA handoff for an STR tax return?

A CPA handoff is the January package a short-term-rental host sends to their tax preparer: an income-and-expense file (Schedule E backup, reconciled against bank statements), a §469 qualification file (material-participation hours, average-stay, and §280A personal-use days), and a cover note stating the §469 position being claimed. The point is to give the CPA what they need to prepare and sign the return without having to assemble records themselves. A clean handoff shortens the engagement, reduces back-and-forth, and lowers the chance the CPA finds a record gap after the return is drafted. General information, not tax advice; confirm with your CPA.

When should I send my STR tax records to my CPA?

The 1099 and W-2 forms land on separate statutory calendars. 1099-K from platforms (the restored 2026 $20,000-and-200-transaction threshold) by Jan 31; 1099-NEC from vendors paid $600 or more in trade or business by Jan 31; 1099-INT from banks by Jan 31; W-2 by Jan 31. Brokerage consolidated 1099 (1099-B, 1099-DIV) typically arrives by Feb 15 and is routinely extended to mid-March. Mortgage-interest Form 1098 by Jan 31 under Reg. §1.6050H-2 (many lenders earlier). Property-tax bills vary by jurisdiction; insurance premium statements typically by mid-January. The §469 qualification file (MP hours, average-stay, personal-use) can land with the handoff packet by Feb 1; it is a planning document, not a tax form, so earlier is better but not time-pressured. Depreciation schedules from the prior year carry forward; new placed-in-service assets need the invoice plus the placed-in-service date. General information, not tax advice; confirm with your CPA.

What is the two-file structure for an STR §469 file?

The money-side file is Schedule E backup: per-property income (platform payouts, direct bookings, cleaning fees collected), per-property expenses (cleaning, maintenance, utilities, supplies, insurance, mortgage interest, property tax, HOA, depreciation), bank statements supporting every line, and a Schedule E line-mapped export from a bookkeeping tool or a reconciled spreadsheet. The §469 qualification file is the record that supports the non-passive position: material-participation hours per activity under §1.469-5T, average-stay per activity under §1.469-1T(e)(3)(ii)(A) (the 7-day test), personal-use days under §280A(d)(1), and mileage with per-entry stated business purpose under §274(d) substantiation. The two files answer different IRS questions; the CPA attaches summary numbers to the return and keeps the raw files in their engagement folder. General information, not tax advice; confirm with your CPA.

What questions will my CPA ask about my §469 position?

Six questions reveal most record gaps. First: can you prove you were there (contemporaneous logs, calendar entries, platform messages). Second: what was the average-customer stay by day count for the activity (if above 7 days the loophole closes under §1.469-1T(e)(3)(ii)(A)). Third: how did you keep investor-type work out of the hour count under §1.469-5T(f)(2)(ii). Fourth: are the hours contemporaneous or reconstructed, and if reconstructed, from which sources. Fifth: do you have mileage with stated business purpose per entry under §274(d). Sixth: did any other individual (cleaner, co-host, property manager, handyman) log more hours than you in the activity (the (a)(3) 100-hour path closes if they did). A CPA familiar with STR work asks these as a matter of course. General information, not tax advice; your CPA has the call.

What red flags will my CPA push back on?

Five patterns that trigger pushback. A reconstructed hour log where every entry is in the same handwriting, same color, same month, with no corroborating platform messages or calendar entries. An average-customer stay just under 7 days that depends on counting a single long stay as several short ones. Personal-use days reported as repair days without a scope-of-work record for the trip. Mileage totals computed as miles times IRS rate with no per-trip purpose record. Hour counts that exceed the plausible operating workload for the property (a single-property solo host logging 900 hours in a year invites a §1.469-5T(f)(4) credibility conversation). A CPA who signs a return without pushing on these is doing you no favors; the IRS will. General information, not tax advice; confirm with your CPA.

What should I do if my CPA says they don't do STR returns?

Thank them for the honesty and look for a CPA who handles STR §469 non-passive positions as a regular part of their practice. Signals of fit: the firm uses the terms material participation, 7-day average-stay test under §1.469-1T(e)(3)(ii)(A), and §280A personal-use ceiling without prompting; they ask for a §469 qualification file before quoting the engagement; they can walk you through the (a)(1), (a)(3), §1.469-4 grouping, and §469(b) suspension paths without reaching for a reference. Red flags: the quote comes before any records are seen; the firm pitches "maximum deduction" without asking what the hour log looks like; the firm has no retention policy for the §469 qualification file. A CPA who declines because they don't handle STR work is doing you a favor; a CPA who takes on STR work they can't substantiate is not. General information, not tax advice; interview before engaging.

Can I hand my CPA a Baselane export and a spreadsheet?

Yes, provided the two files cover what the CPA needs. A Baselane per-property Schedule E CSV plus a bookkeeping-tool P&L can cover the money side of the handoff (based on publicly available information as of 2026-09-09, spot-checked 2026-11-01). A spreadsheet can carry the §469 qualification file: material-participation hours by activity, average-stay by day count, §280A personal-use days, and mileage with stated purpose per entry. The CPA cares that the files answer the §469 questions, not which tool produced them. The failure mode is a two-tool split where the §469 record lives in one system and the money record lives in another, and the handoff turns into reconciling exports from both. One tool that covers all three §469 record axes removes that reconciliation step but is not strictly required. General information, not tax advice; confirm with your CPA.

Does Field Ledger produce a CPA-ready export?

Field Ledger produces per-property CSV exports covering the three §469 record axes: material-participation hours by activity against the §1.469-5T(a)(1) 500-hour and (a)(3) 100-hour markers; average-stay by day count against the §1.469-1T(e)(3)(ii)(A) 7-day test; §280A(d) personal-use days against the greater-of-14-days-or-10%-of-rental-days ceiling. Mileage is reported with per-entry date, destination, miles, and stated business purpose under §274(d); mileage entries that lack a stated purpose are flagged separately, not totaled into the deduction. The Schedule E CSV carries operating subtotals mapped to Schedule E lines with MACRS class-life notes and a de-minimis flag. Plain-English capture (where enabled on your plan) assembles typed-draft entries you review and confirm before each one saves. The exports go to the CPA; the full capture history stays in your account for retention. Not tax advice; your CPA signs the return.

What's a §469 qualification file?

A §469 qualification file is the record that documents which §1.469-5T material-participation test the taxpayer is claiming for an activity. It carries three record axes: material-participation hours per activity against §1.469-5T(a)(1) 500-hour and (a)(3) 100-hour markers; average-stay by day count under §1.469-1T(e)(3)(ii)(A) (the 7-day test); and §280A(d) personal-use days against the greater-of-14-days-or-10%-of-rental-days ceiling. Plus mileage with §274(d) substantiation and a one-page year-end summary (signed by the taxpayer) stating hour totals and the §469 test path identified. The file supports the non-passive loss position if the return is examined. General information, not tax advice; confirm with your CPA.

Do I attach the MP log to my return?

No. The §469 material-participation (MP) hour log is a contemporaneous record kept with your personal tax files; it does not attach to Form 1040 or Schedule E. The CPA references it to defend the §469 non-passive position if the return is examined. Retain the log under §6001 for the applicable audit window: three years under §6501(a), six years under §6501(e) if substantial-omission applies. General information, not tax advice; confirm with your CPA.

How much does a CPA charge for an STR return?

The engagement fee varies by region, number of properties, complexity of the §469 position, and whether the firm charges hourly or flat-rate. STR-specialist firms typically quote higher than general-practice preparers because the §469 non-passive position requires record review and the engagement carries more examination exposure. Ask for a scope-defined quote after sharing the §469 qualification file, not before. General information, not tax advice; confirm with your CPA.

Related guides

Statutory sources

  • IRC §469 (passive-activity loss limitation): §469(a) current-year disallowance, §469(b) suspension and carryforward, §469(c)(2) rental activity, §469(c)(7) real-estate professional (does not apply to STRs under the 7-day exception), §469(g)(1) release on complete taxable disposition, §469(h)(5) spouse aggregation.
  • Treas. Reg. §1.469-5T: (a)(1) 500-hour test, (a)(3) 100-hour test, (f)(1) inclusion rule for work in connection with the activity, (f)(2)(i) two-part anti-abuse carve-out, (f)(2)(ii) investor-activity carve-out, (f)(4) reasonable-means standard.
  • Treas. Reg. §1.469-1T(e)(3)(ii)(A): 7-day average-stay test pulling the activity out of per se rental classification.
  • Treas. Reg. §1.469-4: grouping election for multiple activities.
  • IRC §280A: §280A(d)(1) personal-use day ceiling (greater of 14 days or 10% of fair-rental days).
  • IRC §274(d) and Reg. §1.274-5T(b)(6)(i): substantiation elements for travel and transportation (amount, time, place or destination, business purpose).
  • IRC §6001: taxpayer record-retention requirement.
  • IRC §6662: accuracy-related penalty.

The key takeaway

A defensible §469 file for your CPA is two files and a cover note, delivered on the January calendar. The money-side file is bank-reconciled Schedule E backup. The §469 qualification file carries the three record axes: material-participation hours, average-stay against the 7-day test, and §280A personal-use days. A one-page cover note states the §469 path per activity and flags any reconstructed segments honestly. The CPA questions that follow (six of them, repeatable across any preparer who knows the STR position) reveal where the record needs supplement before the return is signed. Run the self-audit first; then package; then hand off. Not tax advice; the preparer signs the return.