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Deductible expenses on a condo put up for sale in 2019 but not sold until 2020

We have a condo that was purchased in 2010 for $113,000. It was rented in 2010 and 2011 and then converted to personal use in 2012. In May 2015 it was converted back to a rental property until August 2019 at which point we decided to sell it. Once the tenant moved out we did some work in it to get it ready to sell. It will be sold in February 2020 and the sale will be on the 2020 tax return.

 

But for 2019 my questions are:

  1. For tax purposes did it stop being a rental property in August 2019 and were any condo expenses we had after that time personal expenses? We paid real estate taxes and the condo fee. I also assume that depreciation can be taken though the rental period.
  2. In October 2019 we paid approximately $3,000 to have the condo painted to make it more saleable. Is that deductible as an expense of the sale in 2020 even though we paid it 2019? Or is it a maintenance expense in 2019?

Thanks for any advice.

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1 Reply
RobertG
Expert Alumni

Deductible expenses on a condo put up for sale in 2019 but not sold until 2020

For tax purposes it stopped being a rental in August 2019.  The expenses after that aren't personal, but they aren't rental expenses. 

 

The $3,000 painting cost should be claimed as a fixing up expense or an expense of sale in 2020.  

 

Here's what the IRS says:

 

Vacant while listed for sale.

If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property isn’t held out and available for rent while listed for sale, the expenses aren’t deductible rental expenses.

 

Publication 527, Residential Rental Property

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