new rental property

[2904norman]

I purchased a multi-unit rental property and closed on january 3rd, 2024. There were some expenses that were required for closing were made in december such as insurance and some agreed upon repairs shared by myself as the buyer and the seller to meet the lenders closing requirements. since these costs were incurred in december of 2023 and before i technically owned the rental, am i out of luck on those expenses ($10K)?

Secondly, i have done a ton of reading on the repair vs improvement deductions. This rental required extensive repairs - exterior siding, flooring, mold, paint, foundation, electrical, cabinets, countertops, fixtures, etc. Additionally I had to purchase new appliances - which were under $600 a piece so my understanding is that i can expense those instead of depreciating. In total repairs were over $50K to get the units livable plus interest and other expenses vastling exceeding my revenue by nearly $75k.  I should be able to deduct all these as expenses against my families W2s correct vs depreciating since we did not do any capital improvements but got the rental back to its intended state?

[MaryK4]

You can add the acquisition expenses to your basis so they can be deducted as a depreciation expense even if they were paid in 2023.  Just be sure to keep the detailed records with your tax records.

Real estate losses, in general, are considered passive activity losses; so they can only be used to offset other passive activity income (for example, if you had other rental properties with income your losses could be used to reduce that income).  They do carry forward so when you sell the property, you will have be to use the losses to offset any taxable gain on the sale of the property and it can be then used against other income as well.  There is a limited $25,000 loss if your adjusted gross income is less than $100,000. (See Special $25,000 allowance.)