Buy vs. Stay Invested + Rent — Interactive Model

Assumptions Closing costs 1.5% of price. Fixed opex growth 3%/yr, rent growth 3%/yr. Land/building split 33.9%/66.1% (Eagle County assessor). STR license confirmed available for this address (per Sarah, Jul 2026); Town of Vail is separately discussing a 2-year-ownership rule for future STR licenses — not yet enacted.
Interest-only option When toggled on, models no principal paydown at the rate set on the Mortgage rate slider, for the full projection window shown (not just the real 10-yr IO term), on the assumption you exit before the note reamortizes or balloons. See the on-screen note if exit year is pushed past year 10.
§280A Personal use flagged if it exceeds the greater of 14 days or 10% of STR nights rented. Trapped = rental deductions capped at rental income, no loss shelters outside income (LTR unit is always passive under §469 regardless).
§280A allocation When trapped, mortgage interest and property tax are split between rental and personal use by rental days ÷ (rental days + personal days) — the IRS's position (Prop. Reg. §1.280A-3(d)) — before the income cap above is applied. Some courts (Bolton v. Commissioner) allow rental days ÷ 365 instead, which shifts more to the personal side; not used here since that side has zero value for you (your $750K primary-home qualified residence interest cap is already exhausted), so the personal-use share is modeled as lost, not shifted elsewhere. Have your CPA confirm which position to take. Other operating expenses (insurance, utilities) and depreciation are not yet allocated the same way — still modeled at full value when trapped; flag if you want that added too.
Non-passive path Requires §280A clear AND documented material participation (100+ hrs, more than any other individual incl. management staff). Loss then offsets ordinary income and capital gains (e.g. an INFQ sale) in the same year, subject to the §461(l) excess business loss cap — $256,000 for Head of Household in 2026 (OBBBA reset thresholds down from 2025 levels). Excess carries forward as an NOL, not a current-year offset.
Self-employment tax Not modeled — generally does not apply to Schedule E STR income (cleaning between stays only, no daily housekeeping/concierge). Only applies with hotel-like "substantial services" (§1402), a different test than the one that makes the activity non-passive for loss purposes (§469). Confirm your actual service level with your CPA.
QBI Simplified 20% of positive qualifying net income when non-passive & §280A-clear — does not model W-2 wage/UBIA phase-outs at higher income. Real estate professional (REP) status is not modeled as a lever here: it requires real property trades to be more than half your total working time, which isn't realistic alongside the Christy Sports/QuEra consulting load.
Exit analysis Applies selling costs and a blended recapture rate (ordinary-income recapture on accelerated 5/7/15-yr components + 25% unrecaptured §1250 gain on straight-line) against cumulative depreciation taken through the exit year — a simplification, not a substitute for an actual basis/gain calculation at sale.
Tax-rate mechanics are simplified to one marginal rate. In reality an ordinary loss reduces ordinary income first; because capital gains stack on top of ordinary income, the real benefit against a specific LTCG (like INFQ) depends on exact bracket-stacking — have your CPA model your actual return. See notes/vail-black-gore-dr-analysis-2026-07-09.md for the full narrative writeup. Not tax or legal advice; verify with your CPA/advisor before acting.