I bought a rental in June 1 and the first 30 days I did some make ready and repairs, and ready and listed on July 1 for rent, for example.
You mentioned expenses before rental are added to the basis for depreciating the property.
How about Property Taxes and Home Insurance Premium since they are kind of expenses that seem to be for 12 months and spread-out throughout the 12 months.
For property taxes that year, do I have to prorate the amount into before and after July 1 (the placed in service date) so that for the portion before that date I will add it to basis, and after that date I expense it, even though I paid the property taxes at the end of the year (or sometimes even the year after), but either time the property had already become a rental.
Similar question for insurance premium. It was paid at closing for 12 months when it was not a rental, but after 30 days it became a rental. Do I prorate the first month into basis and 11 months into expense?
Thank you.
