IRS Publication 527 Residential Rental Property states the following at page 4 regarding pre-rental expenses:
Pre-rental expenses. You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent.
Thus, your pre-rental expenses are not deductible. We agree with the prior posts in that your pre-rental expenses should be added to the basis in your rental property. This includes your "closing" expenses, such as appraisal costs, fire insurance, as well as your repair costs. The total of all of these pre-rental expenses represents your adjusted basis ( the cost plus all your pre-rental expenses).
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