Lake Cumberland, KentuckySTR Bonus Depreciation Market Profile · #1 in the DepreciMax Top 50
America's #1 STR bonus depreciation market — 78% of active Lake Cumberland short-term rentals hit ≥24% bonus-eligible % of purchase price, and Kentucky's full §168(k) conformity means investors capture the entire federal-plus-state Year 1 benefit. Lake-house and cabin amenity stack — docks, hot tubs, fire pits, decks — drives an amenity-heavy 15-year improvement basis.
Median Year 1 Deduction
$94,159
on a $347k STR · ~$35k federal tax savings at 37%
Lake Cumberland is the #1 ranked market in our 2026 STR Bonus Depreciation Market Study, with a 27.1% median bonus-eligible share of purchase price — the highest of the 197 US STR markets analyzed.
Median STR Listing Price
$347k
Median across active STR-suitable listings. 500–1,000 short-term rentals in market.
Diamond Density
78%
Share of Lake Cumberland STR listings that hit Diamond tier (≥24% bonus-eligible % of purchase price).
Bonus-Eligible %
27.1%
Median % of purchase price classifiable as 5-yr or 15-yr property under §168(k).
Federal Savings @ 37%
$35k
Median federal tax savings on a $347k purchase.
Lake Cumberland at a glance
Rank: #1 of 50 (DepreciMax Top 50 · 2026)
Median Year-1 deduction: ~$94,159 on a $347k STR
Bonus-eligible %: 27.1% (market median, share of purchase price classifying as 5-year or 15-year property)
Diamond density: 78% of Lake Cumberland STR listings hit ≥24% bonus-eligible % (national Diamond tier)
Gold-or-better density: 90% of listings hit ≥22%
Kentucky state §168(k) conformity: Full — full federal + state benefit
Airbnb market depth: 500–1,000 active short-term rental listings
Bonus depreciation (IRS §168(k)): a federal tax provision letting investors deduct 100% of qualifying property costs in the year the property is placed in service. For short-term rentals, the deductible portion is the 5-year (personal property) and 15-year (land improvements) components of the total purchase price. See what bonus depreciation is for short-term rentals for the full explainer.
Bonus-eligible %: a DepreciMax metric — the share of a property's purchase price that classifies as 5-year or 15-year property under §168(k), and is therefore 100% deductible in Year 1. Lake Cumberland's market-median bonus-eligible % is 27.1% — meaning a typical $347k Lake Cumberland STR generates ~$94k of Year-1 deduction.
The 7-day STR rule: to unlock the "STR loophole" — where bonus depreciation offsets W-2 and other ordinary income, not just passive rental income — the property must average a guest stay of 7 days or less and the owner must materially participate. See how to qualify for the STR loophole.
Lake Cumberland spans Russell, Pulaski, and Wayne counties in southern Kentucky; none of the three counties nor the surrounding cities have enacted a dedicated short-term rental ordinance beyond state transient room tax. Permit: — · Cap: No · Min stay: None · Owner-occ.: —. Verified 2026-08-16 against primary jurisdiction sources — read the full regulations profile →
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Kentucky State Conformity — Full
Kentucky fully conforms to federal §168(k). Investors capture the entire Year-1 federal deduction (~$35k typical at the median) plus Kentucky state-level tax savings against Kentucky's 4.0% flat income tax. Combined effective savings on a median-priced Lake Cumberland STR are ~$38k–$39k in Year 1 — one of the strongest all-in benefits in the Top 50.
Why Lake Cumberland ranks #1 for STR bonus depreciation
Lake Cumberland is the #1 STR bonus depreciation market in America — the combination of highest-in-class market-median bonus-eligible %, 92% Diamond density, an entry price point ($275k–$429k typical range) that keeps individual deductions accessible, and Kentucky's full §168(k) conformity delivers the strongest all-in Year-1 benefit on the list.
What drives Lake Cumberland's high bonus depreciation?
Lake Cumberland STRs lean heavily on the amenity categories the IRS classifies as 15-year land improvements: hot tubs, fire pits, outdoor kitchens, pergolas, and — critically for a lake market — private docks and shoreline improvements. All 100% bonus-eligible in Year 1 under §168(k). That amenity density pushes the market-median bonus-eligible % to 27.1%, the highest in the DepreciMax Top 50.
Does Kentucky conform to federal §168(k) bonus depreciation?
Yes — Kentucky is a full-conformity state. Federal bonus depreciation flows through to the Kentucky return at 100%, so investors capture the state benefit in addition to the federal deduction. On a median-priced $347k Lake Cumberland STR, that's ~$35k in federal savings at a 37% bracket plus ~$3–4k in Kentucky state savings at Kentucky's 4.0% flat rate — roughly $38k–$39k combined. Kentucky-resident investors should still model the specifics with their CPA, but the state layer is additive, not subtractive.
Common bonus-eligible amenities in Lake Cumberland STRs
Prevalence of 15-year land improvements we typically see across Lake Cumberland short-term rentals — all 100% bonus-eligible in Year 1 under IRS §168(k):
Private dock or boat slip
71%
Hot tub or spa
68%
Fire pit / fire feature
64%
Outdoor deck or wraparound porch
59%
Outdoor kitchen / BBQ area
38%
Pergola or covered patio
29%
Lake Cumberland vs Poconos vs Branson — bonus depreciation comparison
The three highest-Diamond-density STR markets in the DepreciMax Top 50. All three lead on amenity-driven 15-year improvements; the differentiation is price point, state §168(k) conformity, and how much of the deduction flows through at the state level.
Lake Cumberland bonus depreciation calculator (by zip code)
Lake Cumberland spans 4 primary sub-markets across the Somerset/Jamestown/Russell Springs corridor with materially different STR economics. The calculator below has a zip dropdown — switch it to your area. The bonus-eligible percentage (Lake Cumberland's market-typical 27.1%) stays constant across zips because it reflects the property type, not the location. Kentucky full — federal deduction flows through fully at the state level too.
Lake Cumberland zip code comparison
Zip
Sub-market
Land ratio
Typical price
Typical Year-1 deduction
42629
Jamestown (highest)
High
$429k
$116k
42501
Somerset
Moderate
$347k
$94k
42519
Burnside
Moderate
$310k
$84k
42642
Russell Springs (lowest)
Very low
$275k
$75k
Sample calculation: $347k Lake Cumberland STR (median-priced Somerset listing)
Purchase price: $347,450
Lake Cumberland market median: 27.1% of purchase price classifies as bonus-eligible 5-yr + 15-yr property under §168(k)
Year-1 §168(k) deduction: $94k
Federal tax savings at 37% bracket: $34.8k
See IRS Publication 946 for §168(k) rules. Use the interactive calculator below to model your specific deal.
Looking for a deeper read on your specific property, not just the market median? Run the $99 Lake Cumberland property report — our AI analyzes 7–9 listing photos against the IRS classification rules and returns a line-item §168(k) estimate closely calibrated to a formal $5K–$8K cost seg study.
Representative listings & deductions
Three live Lake Cumberland listings spanning entry, mid, and high price tiers. Year 1 deduction is estimated as a range around the Lake Cumberland market bonus-eligible average (27.1% ± 3 percentage points). Click any card to run a full property report to tighten to one exact number.
How to use this data to underwrite a Lake Cumberland STR deal
The market-median numbers on this page are a screening tool, not a final answer. Here's how STR investors and their CPAs actually convert a market rank + median bonus-eligible % into an underwriting number for a specific offer.
Screen the deal against the market median. If a Lake Cumberland listing is priced within the p25–p75 range ($275k–$429k) and looks like a typical cabin or lake-house STR, the market-median 27.1% bonus-eligible is a defensible screening estimate. That gives you a Year-1 deduction range you can plug into an initial underwriting model in about 60 seconds — before you invest CPA time or offer-drafting effort.
Adjust up or down based on amenity signals. Lake Cumberland properties with a full outdoor stack (private dock + hot tub + fire pit + wraparound deck + outdoor kitchen) trend toward the Diamond tier at 24–30% bonus-eligible. Properties without lake access or with minimal outdoor amenities — condos, dry-lot cabins, subdivision homes — trend toward the Bronze tier at 18–20%. Use the amenity checklist to categorize before you commit.
Model the offer with the deduction baked in. Take the estimated Year-1 deduction × your federal marginal rate (typically 37% for high-earner STR investors) = federal tax savings. Add this to your effective Year-1 cash-on-cash return. On a $347k Lake Cumberland STR at 27.1% bonus-eligible, that's ~$35k in federal savings — often 10–14% of purchase price flowing back into Year-1 cash. Kentucky's full §168(k) conformity adds another ~$3–4k in state-level savings at Kentucky's 4.0% flat rate, bringing the combined benefit to ~$38k–$39k.
Verify with a $99 property-level report before you sign. Once you're past screening and preparing to make an offer, run the specific property through DepreciMax's photo-analysis pipeline. The $99 report tightens the estimate to a single number, line-items the 5-year / 15-year / 39-year breakdown, and delivers a calibrated Year-1 number closely calibrated to a formal cost segregation study's bonus-eligible %. Your CPA can build the return directly from this output; a formal engineered study (typically $5,000–$8,000) is only necessary post-closing for IRS-defensible filing on very large deductions or high-scrutiny audit risk.
Lake Cumberland's #1 rank comes from the DepreciMax Top 50 methodology: we score every active STR-suitable listing across the nation's most-watched STR markets on land value, state §168(k) conformity, and amenity mix, then rank markets by the median bonus-eligible % of their active listings. Individual property estimates are closely calibrated to a formal cost segregation study.
Sample listings are real active for-sale listings — actual addresses shown. Bonus depreciation outcomes vary by individual property; this page estimates ranges for typical purchases. Not tax advice — consult your CPA before making investment decisions.
Score live Lake Cumberland properties — for your specific deal
Run any active Lake Cumberland listing through the DepreciMax property scorer. Free market search shows you every listing ranked by bonus depreciation potential. $99 per detailed AI report on a specific property — closely calibrated to a formal cost seg study.
