- Improvements, including all new kitchen built-in appliances (purchased 10/21 but arrived and installed 11/21 through 2/22) and upgraded light fixtures (purchased 11/21 and installed in 2022). Are these added as assets and sold with the home? Are they in service and are they depreciated if the property is vacant and the appliances are never used by a tenant? These are added to the basis of the home. They were never in service and can't be deducted.
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- Utility costs while vacant.
- Tenant move-out deep cleaning.
- Non-routine sale-prep gardening and maintenance costs while vacant
These are personal expenses and are neither deducted nor added to the basis. the property was not available to be rented.
Vacant rental property. If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you cannot deduct any loss of rental income for the period the property is vacant.
Vacant while listed for sale. If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses.
Any expense that was incurred while the property was rented or placed in service and available to rent is deductible. If you only have one day or one week's worth of expenses, you deduct that amount only.
Placed-in-Service Date An owner can begin to depreciate property when he or she places it in service in his or her trade or business or for the production of income. Property is considered placed in service in a rental activity when it is ready and available for a specific use in that activity.
