Got it. But in your example of fixing the door knob before converting to rental…it’s not deductible and it’s not able to be capitalized as part of basis…but could you amortize it as a start-up cost for your rental business?
I guess I should also lose the hypotheticals and say, I qualify as real estate professional for 2021 only, and spent a lot preparing my property for rent. I was sleeping in the property to work on preparations, but kept a primary residence elsewhere. Purchased on 4/16/2021 but didn’t have renters until November (who paid me in September), and I started advertising on AirBnB starting in May, altho I had to cancel a booking in July because property was not truly ready (and I had to subcontract another home for my first November renters because condition of home was still not 100 and they would not be satisfied…was dealing with so many COVID supply chain issues). Anyway the question is (A) what the hell is the in-service date (because AirBnB listing was up when property was still not “ready”), and (B) can I take the $5k start-up deduction and amortize other early expenses before that date? It’s odd because I was spending on things like “Advertising” costs before I even closed on the property (working on pricing and direct website). At least there’s bonus depreciation for all the furniture and furnishings, so dates don’t matter too much there, but dates for expenses are all over and I don’t know where the dividing line is and how to treat expenses on either side…
