Signed with a prop. mgmt. company to run prev. residence as rental on 8/27, fixes 8/27-9/15, move out 9/10,is the "in-service-date" 8/27?fixes/cleanup "rental expenses"?

TT-User · ‎June 1, 2019

I signed with a property management company on August 27 to run my previous residence as a rental property for a year. I was still occupying the house between August 27 and September 10 to do fixes and cleanup, got contractors and have receipts for fixes and cleanup done, keys given to management company on 9/15 after all fixes are done. So is the "in-service-date" August 27 when I signed the contract? What about fixes and cleanup cost between Aug 27 - Sep 15? Are these considered rental expenses? I am splitting them proportionally between "personal use" for the days I occupied the house (Aug 27 - Sep 10) and the days when it was rented in 2018 (66 days).

CherylW · ‎June 1, 2019

The in-service date will be the first day it was available for rent, September 15.

All the expenses you had before it was rented should be capitalized, either added to the rental property's basis, or put in a separate category, like "Start-up Costs".

To get to the capitalize-depreciate section:

1. Click Federal Taxes across the top.

2. Click Wages & Income across the top.

3. Click I’ll choose what I work on.

4. Scroll down to Rental Properties and Royalties.

5. Click Start or Update by Rental Properties and Royalties (Sch E).

TT-User · ‎June 1, 2019

What about when the property was put in business and percentage of year when it was in business? I had mentioned the start date to be 8/27 and the percentage of year to be the days from 9/15 through 12/31, I am guessing that's wrong, and I now need to calculate using a start date of 9/15, is that correct?

TT-User · ‎June 1, 2019

What about when the property was put in business and percentage of year when it was in business? I had mentioned the start date to be 8/27 and the percentage of year to be the days from 9/15 through 12/31, I am guessing that's wrong, and I now need to calculate using a start date of 9/15, is that correct?

CherylW · ‎June 1, 2019

that is correct, the day it was available for rent.

TT-User · ‎June 1, 2019

Alright, perhaps a bit of twist, but it was available for "future rent" starting at 8/27, does that not count? I mean I had signed the contract with the management company, and they could have easily found a tenant on 8/27 that moves in on 9/16 or 10/1 or so while I was doing the fixes.

Signed with a prop. mgmt. company to run prev. residence as rental on 8/27, fixes 8/27-9/15, move out 9/10,is the "in-service-date" 8/27?fixes/cleanup "rental expenses"?

Investors & landlords

Investors & landlords

Investors & landlords

Investors & landlords

Investors & landlords