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June 5, 2019
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We bought rental property 11/30/16. Can we deduct expenses for fixing it up before it is rented?

  • June 5, 2019
  • 1 reply
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Property is more than 70 miles from us. Can we deduct gas, food, tools, materials needed. We have a none owner occupied mortgage for this property.
Best answer by MargaretL

No, you cannot deduct rental expenses prior to the property being available for rent, unfortunately.  All your expenses paid BEFORE the property is listed as available for rent are simply added to the cost of your home (in your own records).  This includes all your repair/renovating costs. The total amount is called adjusted basis (cost of your home plus your renovations).  Travel and food are not deductible expenses.

Once the property is available for rent, you will start depreciating the rental and use the "adjusted basis" for depreciation purposes and will be able to claim your other rental expenses.

Data entry for rental property once it is available for rent:

  1. Federal Taxes
  2. Wages & Income
  3. Rental Properties and Royalties - follow the instructions  Where do I enter income and expenses from a rental property?

1 reply

MargaretL
MargaretLAnswer
Employee
June 5, 2019

No, you cannot deduct rental expenses prior to the property being available for rent, unfortunately.  All your expenses paid BEFORE the property is listed as available for rent are simply added to the cost of your home (in your own records).  This includes all your repair/renovating costs. The total amount is called adjusted basis (cost of your home plus your renovations).  Travel and food are not deductible expenses.

Once the property is available for rent, you will start depreciating the rental and use the "adjusted basis" for depreciation purposes and will be able to claim your other rental expenses.

Data entry for rental property once it is available for rent:

  1. Federal Taxes
  2. Wages & Income
  3. Rental Properties and Royalties - follow the instructions  Where do I enter income and expenses from a rental property?