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Deductions & credits
Yes, you should include Schedule E for this property, even if it wasn't rented all year. Do NOT check the box for "I did not rent, nor attempt to rent, this property at all in 20XX" or TurboTax will delete all the property information from your return. Instead, enter one rental day to preserve the historical information and allow you to take depreciation.
According to IRS Pub 527 - Vacant Property, you can’t deduct any loss of rental income for the period the property is vacant.
You can, however, continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it isn’t available for rent. (IRS Pub 527 - Idle Property)
Because the property was not available to be rented, any costs for repairs or improvements that you incurred increase the basis of the property and should be entered as a separate Rental Asset (improvements).
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