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February 3, 2024
Question

deducting expenses for preparing my previously rented property for sale

  • February 3, 2024
  • 1 reply
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I hired a contractor to make repairs to my rental property to prepare it for sale after my last renter left. Are those expenses deductible? 

1 reply

February 3, 2024

It depends.  These expenses for repairs can be deducted if they were paid in 2023 and you still had rental activity. If not, and if the property was not available for rent while the repairs were being completed then you will add those expenses as follows:

  1. Capital improvements are added to the cost of the property, then all depreciation allowed or allowable will reduce the cost basis to arrive at taxable gain.
  2. Repairs, unlike capital improvements that extend life to the property, would be added to selling expenses when the property is sold.

NOTE:  Utilities, insurance, trash hauling, as example,  are expenses that are not deductible when the property is not available for rent and pending sale. These are personal expenses.

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