Yes, you are correct. You can't deduct the rental expenses until it is available to rent.
You can deduct the property taxes on Schedule A for 2019.
You may be able to deduct the mortgage interest, prior to renting it out, if it qualifies as a 2nd home. Please see this link for more information: Mortgage Interest on 2nd home.
The majority of your expenses (except for the mortgage interest and taxes) will be added to the basis of the property. Please note that since this is a like-kind exchange, your basis isn't necessarily (probably isn't) the "purchase price of the property." Your Exchange Facilitator should be able to help you with your basis calculation if you don't know it. Generally, it will be calculated (before the addition of the pre-rental property expenses) as follows:
- Start with the adjusted basis in the property you sold, including any mortgage.
- Add the value of any other property you transfer in the exchange, the mortgage amount on your new property, the amount of cash you’re contributing to the new purchase, and any recognized gain on the sold property.
- Subtract any money or property you received in the exchange, the amount of the mortgage on the sold property, and any recognized loss on any property sold in the exchange.
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