Expense for rental property that is under construction

Forum|Forum|1 year ago
February 26, 2025
1 reply
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I just bought a seasonal property (feb. 14th, 2025) that I intend to rent in 2026.

I typically take an expense in the year in which I make it.

I will not have any rents in 2025 as I am renovating the property and will miss this year's seasonal rentals.

How do I deduct expenses that I have in 2025 for the property that will rent in 2026?

Ask the Experts - Vacation - Feb 2025

RobertB4444

You're going to add up all of the renovation expenses. For 2025 this is technically just a second home. But the renovation expenses will add to the price that you paid for the house so that it will increase your basis when it becomes available for rent in 2026. That will increase your depreciation expense as well as reduce the taxable amount if you sell the property in the future.

For 2025 you have nothing that you have to report on your tax return.

@Davignon

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