- If you took the rental out of service as of January 1st, you cannot deduct typical rental expenses. If the property was available for rent, then such expenses can be deducted.
- You can include the cost of repairs if the property was available for rental use. If improvements were made, you can include those costs in the basis of the property.
- If the property was taken out of service as a rental as of January 1st, there should be no depreciation deduction showing from that date through the date of the sale (hence, no recapture for that period).
