Add demolition costs and other losses incurred for the demolition of any building to the basis of the land on which the demolished building was located. Do not claim the costs as a current deduction.

IRC Section 280B disallows deduction for the cost of demolishing buildings.  This cost, and the remaining building basis, is to be added to the lands' basis, therefore would only be recovered upon a future sale of the land

For most types of investment property, the interest paid while improving, building, or constructing the real property falls under the Uniform Capitalization Rules, IRS code section 263A which requires that the interest incurred during construction or improvement should be capitalized instead of currently deducted.

You place property in service in a rental activity when it is ready and available for a specific use in that activity.