We purchased a rental property, and traveled to the location for remodeling for about 7 months before the property was ready to rent on Oct 1st.
I know we cannot include any 'cost' associated with our own labor, but can we include the travel costs that we incurred to reach the rental property during the remodeling phase, which was prior to Oct 1st, for the cost basis used in calculating depreciation.
I am aware that travel for property maintenance is eligible for deductions as expenses after we went 'live' with rentals (after Oct 1st).
This question is strictly for calculating the depreciation basis PRIOR to Oct 1st.
Thank you
Yes, travel costs directly associated with the remodeling and the out-of-pocket costs paid for the remodeling can be added to the cost basis of your rental home.
Since all remodeling was completed prior to placing the property in service for the very first time, that means you only need a single entry for those costs in the Assets/Depreciation section. Just add your transportation costs to that total, and you're fine. However, make sure you keep proof of those costs should you ever be audited on it. While an audit would most probably be slim, never say never.