Purchased New Investment/Rental Property - Not Yet Rented

Forum|Forum|3 years ago
December 21, 2022
1 reply
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If an investment/rental property is purchased in December 2022... and has already amounted a number of expenses (such as property taxes, loan interest, repairs) in 2022, but it was not yet rented (and likely won't be rented until ~March/April 2023 - how can I enter these costs in TurboTax? Every time I fill out the questionnaire in TurboTax, the application indicates that if the property has been rented for 0 days then it doesn't classify as a rental property and it subsequently removes the entry.

Mike9241

see this link as to why the expenses aren't currently deductible

https://krscpas.com/how-are-start-up-expenses-treated-for-new-rental-properties/#:~:text=In%20the%20instance%20of%20rental%20real%20estate%2C%20costs,creation%20or%20acquisition%20of%20a%20trade%20or%20business.

Carl11_2

Employee

The only deductions you have for 2022 are property taxes and mortgage interest. That's it. On top of that, they are a SCH A itemized deduction. The property is basically a second home for 2022. Therefore, nothing concerning this property is reported on SCH E at all for 2022.

But keep your paperwork. Especially from the closing. All of it. Your closing costs will be claimed on your 2023 tax return when you file it next year. I won't bother getting into the details, because all that stuff is over one year away at this point, and tax laws can change quite a bit in that time frame.