Thanks again, Carl. It appears I am using the phrase 'seasonal rental' differently from how the IRS (or at least TurboTax) uses it. It is not a vacation home with short term renters, it is just a rental that we only make available seasonally. This is very common in our area, which has a big tourism economy and lots of seasonal workers. So, for tax purposes I believe it's more like a regular rental which isn't in service 365 days of the year.
I am still wondering - can I deduct expenses related to having the seasonal rental ready before it's in service? It sounds like the answer is no. But I know I will always have such expenses - cleaning expenses in the spring, landscaping, minor repairs, etc.
It also sounds like the answer to this may be slightly different in the first year, when these expenses could be start-up expenses (if I met the criteria to be allowed to do this, which I don't); and when they would not be start-up expenses but merely in-between expenses during the off season.
If the answer is no, it has management implications going forward. For instance, we might try to delay some of those costs, post the place as available for rent a little early, and start squeezing in those expenses as soon as we've put the place in service, and try to wrap up all the expenses before the tenant moves in (this last one, for the sake of the tenant, not for tax reasons).
Is the answer also no for capital improvements? If so, how do you ever make capital improvements (i.e., bathroom remodel) that you would only reasonably make when the property is vacant?
