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How I Turned a $1,000,000 Tax Bill Into $200,000 by Investing in Airbnbs
In This Post
Why most high earners never keep their money
Strategy, not luck
My numbers: what 8 Airbnbs did to my tax bill
Why Airbnb depreciation changes everything
It's not just a depreciation play
The system behind the strategy
Reactive vs. intentional
The real takeaway
FAQ
Who This Is For
Whether you're a business owner staring down a big tax bill, a high-income W-2 earner, or an investor wondering if Airbnbs are worth it, this post is for you. Elliott Caldwell writes straight from experience, no AI, no fluff. Just his real 2025 numbers and the exact strategy that took an estimated $1,000,000 tax bill down to about $200,000.
I hope you enjoy this blog on the entrepreneurs mindset where I talk about building a business, leadership, politics, the economy, wealth, parenting, and my life. As always, no fluff, no artificial intelligence, no holding back, straight from the dome…whether that's good or bad.
Why Most High Earners Never Keep Their Money
Most people think taxes are just part of success.
Make more money. Write a bigger check. Repeat.
That’s how most business owners live. And it’s why most of them never build real wealth, no matter how much they earn.
High earners don’t just need to make more money. They need to keep more of it.
In 2025, I made $2.85 million.
If I’d done what most business owners do, waited until tax season, handed everything to a CPA, and hoped for the best, I would have owed around $1,000,000 in taxes.
Instead, my estimated tax bill was roughly $200,000.
That’s an $800,000 difference.
Here’s exactly how it happened.
Strategy, Not Luck
This wasn’t luck. It wasn’t a shady trick. And it wasn’t buying random properties and hoping depreciation would bail me out.
It was a coordinated strategy: active income from my businesses, paired with a portfolio of short-term rentals, paired with real tax planning.
I’m the co-founder and CEO of The Rise Collective, a low 9-figure business that’s only three years old. We build, manage, and scale Airbnb properties. So I don’t just talk about this. I live it.
My Numbers: What 8 Airbnbs Did to My Tax Bill
I own Airbnbs across multiple states. In 2025, here’s the depreciation they created:
Airbnb 1, North Carolina: $187,984
Airbnb 2, North Carolina: $187,984
Airbnb 3, Tennessee: $201,442
Airbnb 4, Arizona: $282,500
Airbnb 5, Arizona: $342,423
Airbnb 6, Florida: $267,577
Airbnb 7, New Hampshire: $400,000
Airbnb 8, Texas: $200,000
Total: $2,069,910 in depreciation.
Over $2 million in deductions against my income.
Why Airbnb Depreciation Changes Everything
Depreciation lets you deduct the wear and tear of a property, even while that property is going up in value.
Read that again.
On paper, the IRS sees a building wearing out. In real life, I see an asset appreciating.
That’s one of the reasons real estate is one of the greatest wealth-building vehicles in America.
And short-term rentals take it further. With a cost segregation study, you break the property into pieces that wear out faster, like furniture, appliances, flooring, and lighting. With 100% bonus depreciation back in 2026, a big chunk of that can be deducted in year one instead of trickling out over 39 years.
That’s how one Airbnb creates $200,000 to $400,000 in depreciation.
So instead of being taxed on the full $2.85 million, my taxable income dropped dramatically. Legally. Strategically.
If you’re a W-2 earner wondering whether this works for you, it can. The short-term rental tax loophole is how high-income employees get access to the same strategy. I break down exactly how it works, and what you need to do before December 31, in The Short-Term Rental Tax Loophole Explained.
It’s Not Just a Depreciation Play
People hear a story like this and think it’s only about taxes.
It’s not.
The same properties that lowered my tax bill are building wealth four other ways at the same time: natural appreciation, forced appreciation through better design and operations, monthly cash flow, and strong cash-on-cash returns.
Lower taxes, more income, more equity. From the same asset.
That’s the difference between reacting to taxes and architecting wealth. I go deeper on the investment side in Is an Airbnb a Good Investment in 2026?
The System Behind the Strategy
I didn’t buy Airbnbs to get a deduction.
I bought high-performing assets in strategic markets like North Carolina, Tennessee, Arizona, Florida, New Hampshire, and Texas. Properties with proven demand, smart design, and real operations behind them.
Because here’s the truth most people miss. If the deal doesn’t cash flow, the tax savings won’t save you. Taxes should amplify a good investment, not justify a bad one.
"Taxes should amplify a good investment, not justify a bad one." - Elliott Caldwell
That’s exactly why we built BNB Turnkey. It’s a done-for-you, three-phase program that handles everything it takes to launch a high-performing Airbnb: market research, property sourcing, underwriting, design, furnishing, and setup. It’s the same playbook we use on our own portfolio, built for investors who want the right asset without learning every lesson the hard way.
And the tax side needs the same level of expertise. Most CPAs understand the tax code. Very few understand short-term rentals. That’s why we built Surge Tax Advisory & Accounting, a firm built specifically for STR owners and real estate investors who want year-round strategy, not a once-a-year filing.
Reactive vs. Intentional
The average person asks in March, “What do I owe?”
The wealthy ask all year, “What moves should I make now so I owe less later, while building more wealth in the process?”
That’s a completely different mindset.
So when people hear my tax bill went from roughly $1,000,000 to about $200,000, they shouldn’t think, “How did he get away with that?”
They should think, “He understood the game.”
The tax code was written to reward people who invest, own businesses, improve property, and take risk. Airbnb investing, done correctly, sits right in the middle of that.
The Real Takeaway
Don’t just make money. Build a strategy around keeping it.
Don’t just chase income. Acquire assets.
Don’t just think about this year’s tax bill. Think about what portfolio can cut your taxes, grow your income, and build wealth for the next decade.
If you’re a high earner sitting on a big 2026 tax bill, the clock is ticking. Talk to Surge Tax Advisory about your options before December 31. And if you’re ready to own an Airbnb built to perform, start with BNB Turnkey.
I’m not a YouTuber. I’m a builder who documents. Subscribe to the channel and listen to On Successful DNA for more.
Disclosure: Elliott Caldwell is the CEO of The Rise Collective, which owns BNB Turnkey and Surge Tax Advisory & Accounting. Results described are Elliott’s personal results and estimates. They are not guaranteed and individual results will vary.
This article is for educational purposes only and is not tax, legal, or financial advice. Talk to a qualified CPA or tax advisor before making any decisions.
📌 Key Takeaways from This Post
High earners don't just need to make more money. They need a strategy to keep more of it.
In 2025, 8 Airbnbs created $2,069,910 in depreciation, turning an estimated $1,000,000 tax bill into roughly $200,000.
A cost segregation study plus 100% bonus depreciation is how one Airbnb can create $200,000 to $400,000 in first-year deductions.
The same properties that cut taxes also build wealth through appreciation, monthly cash flow, and cash-on-cash returns.
Taxes should amplify a good investment, not justify a bad one. The deal has to cash flow first.
Frequently Asked Questions
How does Airbnb depreciation reduce taxes?
Depreciation lets you deduct the wear and tear of a property over time, even while the property itself is going up in value. For short-term rentals that qualify, those deductions can be used against your other income, which lowers the amount you actually get taxed on. In 2025, Elliott's 8 Airbnbs created $2,069,910 in depreciation, which is how an estimated $1,000,000 tax bill dropped to roughly $200,000.
What is a cost segregation study?
A cost segregation study is an engineering-based analysis that breaks a property into parts that wear out faster than the building itself, like furniture, appliances, flooring, lighting, and outdoor improvements. Instead of depreciating everything slowly over 39 years, those parts can be depreciated over 5, 7, or 15 years. That pulls a big chunk of your deductions into the first years of owning the property.
Is 100% bonus depreciation back?
Yes. The One Big Beautiful Bill Act, signed in July 2025, permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Paired with a cost segregation study, that means many of the shorter-life parts of an Airbnb can be deducted in year one instead of being spread out over decades.
What is the short-term rental tax loophole?
Rental losses are usually treated as passive, which means they can't offset your W-2 or business income. Short-term rentals can be treated differently. When the average guest stay is 7 days or less and you materially participate in running the property, the losses from depreciation can offset your active income. That's why it's called a loophole, even though it's written right into the tax code.
Can W-2 earners use Airbnb depreciation to lower their taxes?
Yes, if they meet the short-term rental requirements. High-income employees use this strategy to bring their taxable income down by owning and actively managing a short-term rental. Material participation has real rules, including hours tracked and documented, so it's important to plan it with a CPA who understands short-term rentals.
Is an Airbnb a good investment just for the tax benefits?
No. As Elliott puts it, if the deal doesn't cash flow, the tax savings won't save you. The best Airbnb investments are in markets with proven demand and have strong design and real operations behind them. The same property can then build wealth through appreciation, cash flow, and cash-on-cash returns, while the tax savings amplify those results.
When should I start tax planning to lower my tax bill?
Now, and all year long. Most people wait until March to ask what they owe, and by then most of the moves that could have lowered the bill are gone. To claim depreciation on a short-term rental for this tax year, the property generally needs to be purchased and placed in service, meaning ready and available to rent, by December 31.
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About the Author
Elliott Caldwell is a serial entrepreneur and founder of The Rise Collective — a vertically integrated portfolio of 13+ profitable businesses spanning real estate, short-term rental investing, hospitality, and wealth strategy. He grew from a $37,000 teacher's salary to over $10M in annual profit, building entirely without outside funding. He writes about entrepreneurship, leadership, wealth, family, faith, and life. Straight from the dome — no fluff, no AI, no holding back.
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