Expenses on a rental property after being advertised as rental but before being rented out

Forum|Forum|1 year ago
February 6, 2025
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Hi,

I have converted my personal property to rental last year. We moved out at 11/25/2024 and listed the property as rental. Then made repairs, cleaned the house, etc. but we did not find a tenant by the end of the year. Can I deduct those expenses from my total income tax even though I did not have a rental income in 2024? If yes, then where and how should I enter it in TurboTax?

MAK70

Yes, you can start deducting rental expenses when the property is PLACED IN SERVICE. You will complete the Rental Property section in TurboTax and report zero income. Note: the IRS does look at many factors when evaluating the placed in service, especially if there was no rental income. For example, you did list the property (good) but making repairs, cleaning are questionable because would the property be considered move-in ready at that point? If it was acceptable and someone could have moved in at any time, but you chose to continue to make it better because it was empty, you have a strong case that it was placed in service.

You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use. See Placed in Service.