Level 15

Investors & landlords

The property remains classified as residential rental real estate *PROVIDED* you do not live in it as your primary residence, 2nd home or vacation home for one single day during the period of vacancy. Now there is a "glitch" in the program that will *REQUIRE* you to indicate that it was rented for one single day in 2019. That's not a problem at all. YOu'll indicate that it was rented for one day, and zero days of personal use. Then for rental income you'll have a zero. (You *MUST* enter something in the rental income section - even it it's the digit zero.)

Then you'll enter your rental expenses of course.

Now note that if the property is not habitable because of the damage, I seriously doubt you have only "repairs" to do. More than likely you have what the IRS will classify as a property improvement, regardless of the reason for that improvement.  Here's the IRS definitions of property improvements and repairs.



Property Improvement.

Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.

To be classified as a property improvement, two criteria must be met:

1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.

2) The improvement must add "real" value to the property. In other words, when  the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.

Cleaning & Maintenance

Those expenses incurred to maintain the rental property and it's assets in the useable condition the property and/or asset was designed and intended for. Routine cleaning and maintenance expenses are only deductible if they are incurred while the property is classified as a rental. Cleaning and maintenance expenses incurred in the process of preparing the property for rent are not deductible.


Those expenses incurred to return the property or it's assets to the same useable condition they were in, prior to the event that caused the property or asset to be unusable. Repair expenses incurred are only deductible if incurred while the property is classified as a rental. Repair costs incurred in the process of preparing the property for rent are not deductible.

Additional clarifications: Painting a room does not qualify as a property improvement. While the paint does become “a material part of” the property, from the perspective of a property appraiser, it doesn’t add “real value” to the property.

However, when you do something like convert the garage into a 3rd bedroom for example, making a  2 bedroom house into a 3 bedroom house adds “real value”. Of course, when you convert the garage to a bedroom, you’re going to paint it. But you will include the cost of painting as a part of the property improvement – not an expense separate from it.


Privacy Settings