Question

Reporting the purchase of vacant land near the beach to eventually be short-term rental??

Forum|Forum|4 years ago
April 12, 2022
1 reply
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Hi. We purchased an unimproved lot near the beach in Florida in the Summer 2021. Now that the environmental permit process is completed, it's time to survey, clear, backfill, and eventually build something on it. It will be primarily used as a short-term vacation rental but we'll also use it occasionally until it's time to retire one day! I've read that I can only deduct the Property Taxes, and that clearing it, etc. are added to the cost basis for later. My question is, for completing my taxes with TurboTax, do I add this land in as another Investment Property (where I was reporting my rental income & expenses) and deduct the Property Tax there, or where/how do I show this new acquisition and deduct the taxes? Thanks.

A

AnnetteB6

You will not enter the property into the Rental Income and Expenses section until it has been placed into service as a rental property.

For now, you will enter the property taxes using the following steps where they will be entered on Schedule A for a possible deduction:

On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where you can type in “property tax” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will give you an option to “Jump to property tax”
Click on the blue “Jump to property tax” link and enter your information