Renting out house (schedule E) for last 23 years. Tenants moved out May 2016, left it trashed. Major remodel for 3 months (kitchen, bath, new windows). Then switched it to an AirBnb (this is in AZ where they treat Airbnb as motel) so I also want to switch to Schedule C starting 9/1. Question is can I deduct the remodel under the Schedule C? Can it be assets depreciated or do I put in start up costs? House was not habitable during the 3 months it was being remodeled.
