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I bought a rental property 3/30/18, but haven't rented because I'm still renovating. Turbo Tax won't let me add as a rental, because I haven't generated any income?

But I have a lot of expenses due to the reno.  Is there another place to deduct the expenses?  If not, am I able to deduct 2018 expenses on my 2019 tax return?   I do plan on having it rented in the next few months.

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4 Replies
Leonard
Intuit Alumni

I bought a rental property 3/30/18, but haven't rented because I'm still renovating. Turbo Tax won't let me add as a rental, because I haven't generated any income?

Yes, you can claim those expenses in 2018, even if you had no rental income, but only if you had made the rental available for rent during the renovations. 

Follow these steps to enter your rental expenses for 2018, if you had rented or attempted to rent in 2018

  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 the property you own?
  3. Follow the program prompts to enter your rental property information

If your rental was not available for rental use in 2018 you will not be able to report the expenses on your 2018 tax return.  If this is the case these expenses will be added to your cost basis in the property to calculate your adjusted basis.  These expenses can only be deducted after you have placed the rental into service, and the property is available to rent. See IRS Pub 527, page 7 for help with figure your cost basis in light of these expenses: https://www.irs.gov/pub/irs-pdf/p527.pdf


[Edited 03/19/2019 | 1:55 pm PDT]

I bought a rental property 3/30/18, but haven't rented because I'm still renovating. Turbo Tax won't let me add as a rental, because I haven't generated any income?

I did as you suggested, and like before, since I have not rented the property out in all of 2018 because we have been renovating it, this is the message I get:

"Since this property was not a rental at all in 2018, you should delete it as a rental. Make sure to keep your complete return, including the Depreciation Report for this property, from 2017 (or the last year this property was used as a rental). You'll need that information when you sell the property or convert it back to a rental."  

I still have legal and mortgage/closing fees associated with this purchase and a lot of reno expenses, how do I account for that on my taxes??

I bought a rental property 3/30/18, but haven't rented because I'm still renovating. Turbo Tax won't let me add as a rental, because I haven't generated any income?

When I click:

I did not rent, nor attempt to rent, this property at all in 2018.

I get the message in the above comment.  

I could leave 0 in the "Days rented at fair rental price", but says:  "Don't include days when the property was vacant".  
Leonard
Intuit Alumni

I bought a rental property 3/30/18, but haven't rented because I'm still renovating. Turbo Tax won't let me add as a rental, because I haven't generated any income?

I have edited my answer to add information on how to deduct the expenses if the property was not available for rental in 2018 this link has information that you may find useful. <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p527.pdf">https://www.irs.gov/pub/irs-pdf/p527.pdf</a>
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