Are travel costs related to purchase of a rental property deductible? If so, where do I enter this in Turbo Tax?

Forum|Forum|6 years ago
June 6, 2019
3 replies
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I am purchasing a rental property in another city. I made a trip to go with a real estate agent to look for a property and I will be making another trip to go to the closing. Are the hotel, meal and mileage costs for either or both of these trips deductible in any way? I currently file a Schedule E for another property I own - this will be my second rental property. I don't think I can put the costs on Schedule E because they were incurred before the property was put into service. Is there another way?

Best answer by PatriciaV

Unfortunately, unless you are a Real Estate Professional, the cost of researching a new property is not a deductible rental expense. These expenses may be considered acquisition costs to be added to the basis of the property.

PatriciaVAnswer

Employee

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SC89

What about travel expenses related to the construction of the rental property out of town? If you rent an apartment, have utilities, and meals? You are overseeing the construction on a regular basis.

Critter

Employee

Until the property is ready for a renter you do not have a rental property so you cannot deduct any expenses related to the non existing rental ... all those costs must be capitalized ( added to the cost basis) and depreciated once the rental is placed IN SERVICE.

RzRob

Yes, any long distance travel to visit your assets or to conduct rental business can be tax-deductible as a business expense.

Airline Fares
Car Rentals and Taxis
Hotels
50 percent of meal expenses during long-distance travel

The operative words are "CAN BE". I agree with the other answerer who commented that travel expenses to research or pre-purchase the property would not be deductible, only the travel expenses after purchase would be deductible.

LanceinDC

What about the travel costs related to the closing/settlement of the property? I've bought a rental near where I grew up and this required traveling up there to sign the paperwork and then while I was there to check out the house thoroughly. Are any of those costs deductions?

JohnB5677

The statement that Critter made earlier is correct. These expenses must be capitalized and depreciated once the rental is placed IN SERVICE.

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hennesey7

Similar question - I am closing on my first property in 20 days or so. Can I Deducting Landlord Out-of-Town Travel Expenses if i DO NOT HAVE AN LLC?

I plan to in the future - but not with just one condo.

Many thanks!

affordable2020

Not until tne unit is put in service as a rental and ready to rent.

hennesey7

I understand the in service part. My question is more related to having an LLC.

Basically. Every article I read has pros and cons of an LLC - but none of them answer the question: Can I write off landlord related expenses if i do not have an LLC?

I live in Florida, the property is in Chicago. After I close on the property, I will need to go to Chicago to get it prepared for renting (painting, cleaning, changing the locks, new appliances, etc...)