I bought a condo on 01/04/16, I signed a contract to rent it on 11/18/2016. It didn't rent until 01/07/17, so I had no income but I had a lot of expenses

[burns890]

($12,000), when can I claim losses.

[PatriciaV · Accepted solution]

It depends on when you incurred those costs and how the money was spent

If you listed the property, then made repairs, you would report those costs under Rental Expenses in the Rental Properties & Royalties section. Expenses greater than income for the current tax year may create a passive loss that will carry forward to next year to offset future income.

However, any expenses you incurred before you listed the property increase the basis of the property and should be entered as separate Rental Assets (Improvements), subject to amortization. These costs would not be recovered until you sell the property.

In general, repairs are expensed and improvements are capitalized. An improvement restores the property or adapts it to a new use. Replacing the wiring, installing new HVAC, and adding a garage, are examples of improvements. A repair expense replaces existing components of the property (carpeting, bath fixtures, appliances, etc.)

See the posts below for help entering this in TurboTax:

• Where do I enter income and expenses from a rental property?
• What kinds of rental property expenses can I deduct?