I BOUGHT A RENTAL HOUSE FOR 54000, I SPENT 20,000 TO UPDATE IT BEFOR I RENTED IT OUT. CAN I DEDUCT THE 20,000 AS A PASSIVE LOSS?

[Phillip1 · Accepted solution]

No.

The money spent on updates for the home should be added to the cost basis. For example, you should enter the starting cost basis of the rental property as 74,000 dollars with a "date placed in service" as of the date that you made the home available for rent.