Yes, those expenses could be considered start up expenses until your rental property is available for rent whether or not you have an immediate tenant. You can either deduct or amortize start-up expenses once your business begins rather than filing business taxes with no income.
Start up costs - if you had any expenses before you actually opened for business services such as legal fees, market study or organization fees.
- Amortize all of them over 180 months (IRC Section 195 Property); OR
- The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, the first year the business/rental is operating, but only if your total startup costs are $50,000 or less
- Add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount
- If you have more than $5000 in start-up costs, the remainder is entered under Assets/Depreciation as a capital asset for amortization as noted above.
- Start up Business Tax Tips
Any assets purchased (house, appliances, capital improvements) will be added as Assets for your rental property. Under rental expenses select Add expenses or assets.
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