I purchased a duplex as an investment/rental in 2015. I live in the upstairs apartment and plan on renting out the downstairs apartment. I spent all of 2016 renovating the downstairs apt. how should I deduct these expenses if I plan on renting out the downstairs apt. in 2017 (when the renovation will be complete)?
Expenses incurred prior to the unit being put on the rental market are not deductible. Renovation costs are added to the cost basis of the unit.
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