I bought a condo to use as a vacation rental in July 2018. It needed a lot of repairs and wasn't rented at all. Can I write off repairs on 2018 taxes?

[bindy500]

I purchased a condo in 2018 to use as a vacation rental. I needed to make numerous repairs and wasn't able to rent it all that year. How do I account for improvements I've made on taxes?

[AlanT · Accepted solution]

Yes, the IRS lets you deduct ordinary and necessary expenses required to manage, conserve, or maintain property that you rent to others. You are allowed to deduct these expenses even if your property is vacant, as long as you're trying to rent it. (Yes you are trying to rent it because that is why you bought it and fixing it up)  

The expenses must be deducted in the year they are paid.   

Now let's enter that rental:

1. In TurboTax, search for rentals and then select the Jump to link in the search result.
2. Answer Yes to the question Did you have any rental or royalty income and expenses in 2018 for property you own?
3. Follow the on-screen instructions as you proceed through the rental and royalties section.
   • We'll ask you to enter general information about your rental (like description, address, and ownership percentage).
   • Eventually, you'll come to the Rental Summary screen, which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses.

[Anonymous]

maybe not all all deductible -  you say this is a vacation rental, did you vacation there in 2018.   

If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of:

14 days, or

10% of the total days you rent it to others at a fair rental price.

 There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses.

[bindy500]

I did stay at condo while I did repairs but not for vacationing. I went back home to another state off and on when contractors had a big job. This was a total makeover with a lot of expense .  Like I  said no income as it was not rentable yet. But that is the goal.