Rental property: Expenses incurred before "in service" date, but paid afterwards.

Forum|Forum|1 year ago
February 19, 2025
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Suppose I prepare a second home for rental, incurring expenses in August 2024. All work is completed in August. Then, on September 1, I advertise the property for rent. (So, as I understand it, the "in service" date is September 1.) I get invoiced and pay for the work as follows:

Case #1: Invoice is dated in August, and I pay it in August.

Case #2: Invoice is dated in August, but I pay it after September 1.

Case #3: Invoice is dated in September, so I pay it after September 1.

Can I expense this in 2024 in any of these cases? Does the timing of the invoice and payments matter?

Not A Product Question

AnnetteB6

If all of the work is completed before the property is placed in service as a rental, then the expenses for the work that was done are personal expenses because you did not have a rental property at that time. The timing of receiving and paying the invoices does not matter.

None of your examples are rental expenses because you stated that all of the work was completed in August before the rental was placed in service in September.

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