I have a multifamily home with 3 units. I live in one unit and the other 2 are rentals that had been rented out prior to 2023. In 2023 I did not rent the units out or advertise them. I do intend to rent the units out again, but would like to do some work such as having the driveway repaved first. Can I deduct expenses on a Schedule E?
If I enter 0 rental days for the property, I'm asked, "Did you try to rent the property to others at all during 2023?" If I choose no, it says "Since you didn't try to rent the property at all in 2023, it's not considered a rental" and to not complete a Schedule E.
From what I can find, IRS Publication 527 does not mention advertising/trying to rent the property as a requirement. I found the following:
Idle Property
Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it isn’t available for rent.
Vacant rental property.
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.
