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TurbooTaxxPreparerr134908
New Member

Do I need to fill out schedule E for 2018? Bought rental property in March & had expenses through December (utilities, repairs, etc.). Posted it for rent in Jan 2019.

The property wasn't rented out in 2018. Do I fill out schedule E with 2018 expenses? Or do I have to wait until 2019 when it is rented to start preparing schedule E and at that point, include all expenses to-date? And this would include startup expenses plus ongoing?
3 Replies
DDollar
Level 4

Do I need to fill out schedule E for 2018? Bought rental property in March & had expenses through December (utilities, repairs, etc.). Posted it for rent in Jan 2019.

Your property was not a "rental" property until January of 2019.  You cannot deduct your expenses like utilities in 2018, nor can you deduct them in 2019.  The costs of repairs and improvements are added to your basis, and can be depreciated. 

TurbooTaxxPreparerr134908
New Member

Do I need to fill out schedule E for 2018? Bought rental property in March & had expenses through December (utilities, repairs, etc.). Posted it for rent in Jan 2019.

So schedule E is applicable for 2019 since this is when the property is listed for rent? And expenses can be deducted then?

Why can't utilities be deducted? (Per IRS Publication 535: Utilities.  Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. However, any part due to personal use isn’t deductible.)

Aren't repair costs deductible? Unless you elect to capitalize? (Per IRS Publication 535: Repair and Maintenance Costs  Generally, you can deduct amounts paid for repairs and maintenance to tangible property if the amounts paid are not otherwise required to be capitalized. However, you may elect to capitalize amounts paid for repair and maintenance consistent with the treatment on your books and records.)
DDollar
Level 4

Do I need to fill out schedule E for 2018? Bought rental property in March & had expenses through December (utilities, repairs, etc.). Posted it for rent in Jan 2019.

The repair costs to improve the property before it is made available for rent can be added to the cost basis.  They are not deductible as expenses after it becomes a rental.  All the expense items you listed are deductible, as soon as the property becomes available for rent.
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