Airbnb expenses question

[girl611]

We had our roof repaired and changed shingle of the entire roof a month (June) before we started our airbnb (July)  in 2019. May I know how do we report this expenses?Our insurance covered part of the fee and we paid some as well, should we put the total charge on tax return or just the part we paid? Also, We reside in the property as well, and we used half of the house as airbnb. Please explain specificy on how do we report this on tax return because we are new to this.Thank you!

[ColeenD3]

If this repair was made prior to starting your AirBNB, you can't deduct it. It is a personal expense. If you made a major improvement, it can be added to the basis of the property.

You may only deduct expenses from the date it is placed in service and available to rent. Any assets you purchased prior to that date are added to the building and depreciated as one asset.

Placed in Service

You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use.

Example.

On April 6, you purchased a house to use as residential rental property. You made extensive repairs to the house and had it ready for rent on July 5. You began to advertise the house for rent in July and actually rented it beginning September 1. The house is considered placed in service in July when it was ready and available for rent. You can begin to depreciate the house in July.

[girl611]

We couldn’t post the listing until we got the roof done and got everything (eg.bed and fridge) ready for the place, but we did the repair for the safety of airbnb guests before we post our listing. We got everything done in July and that was the time we could post our listing since it required pictures on the listing. If this case, I still can’t report them as expenses?Thank you!

[girl611]

Also, is that mean I have to include the roof replacement into the total of the asset, and we can depreciate it?how do I calculate what year is the property?

[AnnetteB6]

The amount that you paid for the roof replacement will be added to the original cost of your home as an improvement.  These questions will be asked in the rental income and expenses section of your return when you are adding the house itself as an asset to be depreciated.  Since you used 50% of the house as the rental property, 50% of the cost plus improvements will be the basis for depreciation.  Residential rental property is depreciated over 27.5 years.  

The other items that you purchased for the rental property prior to actually listing it for rent can also be depreciated (refrigerator, furniture).  When these are entered as assets for depreciation, you will enter the date of purchase and the date they were 'placed in service'.  The date they were placed in service will be the date that your listing was started since that is when the property was first available for rent.