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cmf123
New Member

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

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?

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KrisD
Intuit Alumni

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

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




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1 Reply
KrisD
Intuit Alumni

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

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




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