Property rented or over 15 years and taken out of service for all of 2023 for repairs and improvements.

No, the repairs and improvements are not rental expenses when the property is not available to be rented. Nor can you claim a passive loss to apply to future income.

You can, however, continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it isn’t available for rent. (IRS Pub 527 - Idle Property)

Because the property was not available to be rented, any costs for repairs or improvements that you incurred increase the basis of the property and should be entered as a separate Rental Asset (improvements).

In this case, either say it was rented all year (365 days) or enter one rental day. This preserves the historical information (a work-around for TT limitations).

Note that when you indicate that the property was not rented during the year, all historical information (including Schedule E) will be deleted from your return. Be sure you have a copy of Schedule E and the depreciation report from last year. You will need this info if you rent the property in the future, or when you sell the property.