We owned a rental property that we sold in June 2024. The property was rented only in January 2024. From February 2024 until June 2024 we made repairs in preparation for sale of the property, but did not attempt to re-rent the unit during that time. All of the repairs made were "fix-up" repairs like painting, fixing leaking faucets/fixtures, repairing minor damage to the outside of the unit.
If I understand correctly, repair expenses incurred up to the end of January (when the property was rented) can be used to reduce the rental income received in 2024. However, repairs made in February through June (when the property was not available to be rented while being prepared for sale) can be added to the basis of the property - thereby reducing the capital gains due on the proceeds of the June sale. Is that correct?
How about non-repair expenses incurred from February to June 2024 - expenses like HOA fees paid, or home appliance insurance costs paid. Can these be used to increase the basis of the property sold?
