Hello,
I have a vacant rental property that I purchased in April 2023. I obtained a mortgage for the property and paid closing costs, survey fees, and interest. I did not attempt to rent the property at all in 2023 due to the need for extensive repairs and updates. I started renting the property on January 2, 2024. At no point was there any personal usage of the property in 2022. It was vacant throughout 2023.
Publication 527 states that "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 can’t deduct any loss of rental income for the period the property is vacant." [Emphasis Added]
I understand that the value of the home and the capital improvements will be depreciated when they are put into service in 2023. But what, if any of the following expenses, can I deduct in 2022:
- Mortgage closing costs
- Mortgage interest
- Real Estate Taxes
- Pest Control
- Utilities
- Auto Travel Expenses to work on the property itself
- Individuals/Vendors to whom I issued a 1099
2) If I can deduct some or any of the above in 2022, how do I enter this in TurboTax Desktop?
3) If I cannot enter any of the above on the 2022 return, does it carry over to the 2023 return? I do understand that the depreciation of the real property and the various appliances/major improvements will go on the 2023 return.
