AnnetteB6
Expert Alumni

Investors & landlords

Until the point in time that your property is advertised and made available to rent, you do not have a rental property.  As such, you cannot claim rental expenses, regardless of whether you have income yet.

 

Since you purchased the house and put money into the repairs and improvements before it actually is considered a rental property, all of those expenses will be added to the basis of the house and will be accounted for when you depreciate the house as a rental property.  You will not be able to directly deduct those expenses either on your 2019 return or on your 2020 return. 

 

After the house is placed in service as a rental property, then you can begin to deduct rental expenses such as utilities, repairs, etc.

 

For 2019, you can deduct the property tax paid and mortgage interest if this is a second home for you.  These items would be deducted on Schedule A, not Schedule E since the property was not placed into service as a rental until 2020.  You will only include Schedule E Rental Income and Expenses starting with your 2020 tax return since that is when the property was placed in service as a rental.

 

@zjbeitz

@Redsdad

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