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linyphia1515
Level 2

I bought a house to rent out and as a real estate investment in 2017. I incurred expenses getting it ready to rent in 2017. First rent collected in 2018. What do I do?

 
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KatrinaB
Intuit Alumni

I bought a house to rent out and as a real estate investment in 2017. I incurred expenses getting it ready to rent in 2017. First rent collected in 2018. What do I do?

You should claim a deduction for any start-up expenses in the tax year that the business officially opens. Please view the QuickBooks link below for more information.

https://quickbooks.intuit.com/r/taxes/3-tax-deductions-available-only-to-startup-businesses/

You will not be able to claim a deduction for capital improvements to your rental property on your 2017 tax return either since your rental property was not available for rent until 2018. Instead, you will increase the cost basis in your rental property which in turn will increase your depreciable basis (and increase the amount you will be able to claim as depreciation once your property became available for rent).

Click for more information about depreciation on rental property

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KatrinaB
Intuit Alumni

I bought a house to rent out and as a real estate investment in 2017. I incurred expenses getting it ready to rent in 2017. First rent collected in 2018. What do I do?

You should claim a deduction for any start-up expenses in the tax year that the business officially opens. Please view the QuickBooks link below for more information.

https://quickbooks.intuit.com/r/taxes/3-tax-deductions-available-only-to-startup-businesses/

You will not be able to claim a deduction for capital improvements to your rental property on your 2017 tax return either since your rental property was not available for rent until 2018. Instead, you will increase the cost basis in your rental property which in turn will increase your depreciable basis (and increase the amount you will be able to claim as depreciation once your property became available for rent).

Click for more information about depreciation on rental property

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