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Taxagain
Returning Member

A rental renovation that crosses tax years....when do I claim and depreciate

In 2019 I started remodeling my kitchen  electrical in a rental home but wont be complete until July 2020.  Though I purchased quite of bit of materials for this effort in 2019, the assets themselves wont be "placed" in service until the July 2020 completion.  Do I have to claim what I purchased in 2019 as a 2019 improvement and start depreciating that amount, or can I wait until the project is complete and then claim the entire cost as an improvement and then start depreciation at that time  ?  

 

Also, the IRS Publication 527 states if my travel to the rental home is primarily for the improvement I can not deduct those expenses, does that mean I include these travel expenses in the cost of the improvement and recover through depreciation ?

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2 Replies
Carl
Level 15

A rental renovation that crosses tax years....when do I claim and depreciate

You don't list or claim property improvements until the tax year that property improvement is placed "in service". It does not matter when the property improvement was done either. So you your case, you will enter nothing on your 2019 tax return concerning your renovation, since it was not available for rent at all in 2019.

Even if you did finish a renovation in 2019, if it was not "available for rent" in 2019, you will not enter it anywhere on your 2019 tax return.

 

Taxagain
Returning Member

A rental renovation that crosses tax years....when do I claim and depreciate

Thank you

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