Material Participation Log

Short-Term Rental — Material Participation Record

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Annual Hour Tracker — 2025
0 hrs ⚑ 100 hrs — IRS Threshold 200 hrs
0.0
Hours Logged
100.0
Hours to Threshold
0
Activity Entries
What Counts as Material Participation — Quick Reference

✅ These Hours COUNT

  • Reviewing & approving/declining reservation requests
  • Managing your calendar, blocking dates, setting seasonal pricing
  • Pre-arrival guest communication (messages, instructions, codes)
  • During-stay guest support (answering questions, resolving issues)
  • Post-stay messages, requesting reviews, responding to reviews
  • Coordinating cleaners — scheduling, inspecting after checkout
  • Restocking supplies and amenities (even if ordered online)
  • Scheduling and overseeing repairs or maintenance contractors
  • Performing your own maintenance or repairs at the property
  • LOCAL travel to the property for work/inspection visits
  • Updating listing photos, descriptions, and pricing on Airbnb/VRBO
  • Monitoring competitor rates and adjusting your pricing strategy
  • Bookkeeping, reviewing rental statements, expense tracking
  • HOA meetings, insurance claims, regulatory/permit compliance

❌ These Hours DO NOT Count

  • Personal vacation or leisure days at the property
  • Days family or friends use the property (personal use)
  • Casually glancing at your listing app (must be active management)
  • Hours your property manager spends — only YOUR hours count
  • Time by spouse or family unless documented as co-owners
  • Sleeping, eating, or non-work activities during owner visit days
  • Travel to the property for personal vacations
  • Long distance travel time to the property for work/inspection visits — tax courts have held that travel from 1+ hours away does not count toward material participation hours
  • Passive monitoring — just watching your calendar fill up

⚖️ The IRS Test You Need to Pass

Test 5 (most common for STR investors): You logged 100+ hours AND no one else (including your cleaner or property manager) logged more hours than you did on this property.

Your documented hours must exceed those of any single person you hired. Keep logs specific enough to prove this.

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Record-Keeping Tips for Your CPA
Log as you go — not at year endA contemporaneous log (recorded at or near the time of activity) carries far more weight with the IRS than a reconstructed year-end list. Use this form weekly.
Be specific in your descriptionsInstead of "managed property," write "Reviewed 3 booking requests, declined 1 due to minimum stay conflict, sent pre-arrival info to 2 confirmed guests." The more specific, the stronger.
Owner work visits are NOT personal useDays you travel to the property to inspect, repair, or manage — even if you sleep there — are work days, not personal use days. Document what you did and how long.
Your hours vs. your manager's hoursUnder Test 5, your documented hours must exceed any single person you employ. If your cleaner spends 4 hrs × 50 turnovers = 200 hrs, you need 200+ hrs logged to qualify.
Keep supporting documentationSave screenshots of Airbnb/VRBO message threads, emails with contractors, receipts from supply runs, and photos from inspection visits.
Print this at year end for your CPAUse the Print / Save PDF button at the top. Your CPA will attach this to your tax file as support for the active loss deduction on Schedule E.

Greg Foote Real Estate  ·  RE/MAX of Orange Beach  ·  (251) 504-9224
This log is provided as a client resource. Consult a qualified CPA or tax advisor to confirm material participation status for your specific situation.