@Carl wrote:
Show me where in IRS Publication 527 at https://www.irs.gov/pub/irs-pdf/p527.pdf it says that. I've asked numerous people, including tax experts, to show me. To date, none have.
You cannot rely on the IRS instructions to encompass everything written in the Code and Regulations; there are hundreds of pages of the former but thousands of pages of the latter.
Section 1.266-1, in relevant part, essentially states that an expense can be added to basis (capitalized) if that expense is otherwise deductible. In general, until rental is placed into service as a rental, typical rental expenses are not deductible.
