Deducting an investment property

[CB2012]

My husband and I started a real estate investment business in 2024 and bought a foreclosure house in August 2024 with the intention of fixing it up and renting it as our first investment. We've been fixing it up this year so it hasn't been rented yet but will be available to rent in 2025. Can I still claim depreciation on the property for 2024 even though we didn't rent it? Can I also deduct repairs and improvements for 2024? We put in new windows (the old ones were not functional), rented a dumpster for clean up, ripped out ruined carpet, and replaced it with new laminate, etc.. 

[M-MTax · Accepted solution]

Can I still claim depreciation on the property for 2024 even though we didn't rent it?

No. What you should do is add ALL of the money you spent on repairs and improvements (treat the expenditures as one large rehab project) to your cost basis and then start depreciation deductions, based on that amount, when the property is placed in service.

[Mike9241]

don't forget to allocate part of the cost to land since that is not depreciable.