It’s complicated, but the simple answer is NO. You cannot deduct anything this year.
That assumes your are an investor and not in the business of flipping houses. For an investment house, all your capital costs go to your “cost basis”. When you sell the property, you capital gain (or loss) will be the difference between the sale price and your cost basis (less expenses of sale).
If you end up renting the property, your cost basis determines your depreciable basis.
Until you put it to use as rental property, or sell it, you have an investment property. The carrying costs (e.g. insurance & utilities) of investment property are deductible as investment expenses, but are subject to being a misc. itemized deduction also subject to the 2% of AGI threshold (this is no longer allowed under the new 2018 tax law). Real estate (property) tax may be deducted on schedule A, under taxes, without regard to the 2% rule.
Alternatively, taxpayers can elect to capitalize (add it to your cost basis) the carrying costs of unimproved and nonproductive real property, real property under development or construction and personal property before its installation or use (Regs. Sec. 1.266-1(b)(1)). The election is made with the tax return by its due date, including extension, by attaching a statement. You cannot wait until you sell the property, but must make that election each year. Attach the statement to the return and write “Filed pursuant to section 301.9100-2” on the statement.
Mortgage interest is only deductible to the extent of other investment income and not subject to the 2% of AGI rule, but can be capitalized.
