Can I expense start up costs paid in the year before a vacation rental property was put in service?

[cmf123]

We bought a vacation rental home in December 2015 and began renovations, including painting and decorating. The house was not available for rent until April, 2016. What can I do with these start up costs?

[KrisD · Accepted solution]

NO

You cannot expense anything until the rental is "available for service".

You CAN add the expenses into the basis of the property.

(that will generate a larger depreciation deduction and lower the profit at sale)

For more detailed information, please click on the link below.

CLICK HERE for IRS Pub 527