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Level 1

If my rental home hasn't been rented in the last two years, do I still have to claim it as an investment property? I have had no income from this property in two years.

Due to destructive tenants, I have had to remodel my investment property over the last 2 years. I'm doing the work myself because of a lack of funding on my days off from my regular job. If this property has been sitting empty for this long, do I still have to report it as an investment?

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Level 1

If my rental home hasn't been rented in the last two years, do I still have to claim it as an investment property? I have had no income from this property in two years.

[Information added 2-9-16 10:06 am PST]

Yes, you would continue to show it as a rental (investment) if you want to deduct ordinary and necessary expenses plus depreciation.

  • On the 'Was This Property rented for All of 2015?' screen, answer 'No, this property was not rented all year'.
  • Enter zero (0) in the 'Days rented at a fair rental price' box
  • Enter zero (0) in the 'Personal use during the year' box
  • Continue with the interview.

If you do not want to claim the expenses:

  • On the 'Was This Property rented for All of 2015?' screen, answer 'No, this property was not rented all year'.
  • Check the box 'I did not rent, nor attempt to rent, this property at all in 2015'.  Since this property was not a rental at all in 2015, you should delete it as a rental. Make sure to keep your complete return, including the Depreciation Report for this property, from 2014. You will need the information when you sell the property or convert it back to a rental.

Per IRS Publication 527, Residential Rental Property, https://www.irs.gov/pub/irs-pdf/p527.pdf  Vacant rental property:  If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you cannot deduct any loss of rental income for the period the property is vacant.

1 Reply
Highlighted
Level 1

If my rental home hasn't been rented in the last two years, do I still have to claim it as an investment property? I have had no income from this property in two years.

[Information added 2-9-16 10:06 am PST]

Yes, you would continue to show it as a rental (investment) if you want to deduct ordinary and necessary expenses plus depreciation.

  • On the 'Was This Property rented for All of 2015?' screen, answer 'No, this property was not rented all year'.
  • Enter zero (0) in the 'Days rented at a fair rental price' box
  • Enter zero (0) in the 'Personal use during the year' box
  • Continue with the interview.

If you do not want to claim the expenses:

  • On the 'Was This Property rented for All of 2015?' screen, answer 'No, this property was not rented all year'.
  • Check the box 'I did not rent, nor attempt to rent, this property at all in 2015'.  Since this property was not a rental at all in 2015, you should delete it as a rental. Make sure to keep your complete return, including the Depreciation Report for this property, from 2014. You will need the information when you sell the property or convert it back to a rental.

Per IRS Publication 527, Residential Rental Property, https://www.irs.gov/pub/irs-pdf/p527.pdf  Vacant rental property:  If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you cannot deduct any loss of rental income for the period the property is vacant.