New landlord, expenses incurred 2020 but no income for that year

Hello all,

 

New landlord here trying to sort out how to handle some expenses associated with getting my house ready for rent.

 

At the end of Dec (21st) I moved out of state and prepared my house for rental. During that month I had a bunch of expenses for preparing the property for rent: new washer and dryer installed, painting, cleaning, etc. I got a lease signed with tenants on Jan 10. So I have these expenses in 2020, but no rental income until 2021. 

 

Now I'm wondering when/how/if I can deduct any of this. I've seen some advice online saying that I can't deduct these expenses if they were incurred before the place was rented - in which case I should have waited until it was rented to buy the washer/dryer? Not sure. If any of this is deductible, does it make sense to deduct on my 2020 taxes without showing any rental income? Any help is appreciated!

ColeenD3
Expert Alumni

Investors & landlords

No, it is not deductible before it is rented, but you can capitalize these expenses by adding them to the basis of the property.

As for the appliances, even though you purchased them in 2020, you did not place them into service until 2021, so you will be able to depreciate them.

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