Yes, there can be differences between a rented property and a vacant one.
The main key is whether you are advertising the vacant property for rent while you are renovating it. If it is not being advertised, then it is not yet a rental property. In this case, the cost of the renovations will be added to the basis of the unit when it is converted to a rental. The expenses for utilities are personal expenses and not deductible. You can claim the property tax for the empty unit as part of your Schedule A itemized deductions if you do itemize. You may be able to claim mortgage interest for the empty unit if it can qualify as a second home for you.
The utilities and maintenance costs for the unit being rented are deductible since it has already been converted into a rental property. The same is true for property taxes and mortgage interest (if any). All of these expenses would be reported on Schedule E, along with your rental income.
@JustChris
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
