Can I deduct expenses of our Rental property while it was vacant or between contracts?

[snoopyroc]

This is my case. My husband inherited a property in January of 2018. We put that property to rent since January 2019, it was available and ready to go since the beginning of the year but nobody rented until April. We got our first contract from April 8 to July 15 2019. And our second contract is running now from September 27 to December 31, 2019.  

I know we can deduct : Cleaning and maintenance ; Insurance ; Repairs ; Supplies ; Taxes ; and Utilities for those two periods of time (Apr 8-Jul 15) & (Sep 27- Dec 31).

What about the time when the house was not rented, when we were waiting to be rented (Jan 1-Apr7) or between contracts July 16 to September 26th?

Can I deduct any expenses from those two periods of time? If so, what expenses?

Or not we can only deduct expenses during the time was occupied (Apr 8-Jul 15) & (Sep 27- Dec 31?

We were wondering for the expenses for Cleaning and maintenance, Repairs, and Supplies. Only deduct the expenses during rent period (Apr 8- Jul 15) and (Sep 27 - Dec 31)? Or in this case is different? My husband went to the house several times before the first contract and in between contracts to do repairs and maintenance and he bought stuff to do so, nobody was there but he need to maintain the house.

Now I have a question about the Utilities (Services) while it was rented. Some services withdraw one month after the usage period, I don’t remember if it’s the water or the electricity, in that case what I do? Should I take in consideration the date that it was withdraw from the checking account or the day the house was occupied and that service was used no matter when it was withdraw from the Bank account? For example, the water, the renter was there in July but we got that receipt for that usage in August, can I deduct it? Or not because it was withdraw from the bank when nobody was there (August). Or I just go by dates, I can’t deduct any services that it was withdraw from the Bank Account between Jan1 -Apr 7, and Jul 16 – Sep 26?

Also, what about the Landlord Insurance, Property Taxes, Sewer, those are paid for the whole year?. In the case of the Insurance we paid a sum lump in April, Property taxes two payments: one in February, one in June. Sewer one payment in February. Should I deduct only proportional according to the days the house was occupied? Or the whole amount?

We don’t live in the property while the house is not rented, we didn’t live in the property at all. We own a house in a different part of the city.

This is our first time renting a property and we don’t know what to do. I saved all the receipts for the whole year and I want to start to put them in order but I need to know what to deduct and what don’t.  

Thank you

[Carl]

 The number of days rented is the entire year. Every single day. Period. Vacant periods between renters count as days rented ***PROVIDED*** that the owner did not live in the house for *one* *single* *day* as their primary residence, 2nd home, vacation home or for any other *personal* *use* reason.

If you lived in the house between renters for the primary purpose of getting the property ready for the next renter, then those days *do* *NOT* *count* as personal use days for you. (This can and does happen if the rental property owner lives say, a 100 miles away and it takes several days to do the turn around between renters.)

Any and all expenses related to the rental, including *ALL* cost incurred between renters is a qualified rental expense and is claimed/reported as such. Just make sure you don't confuse a qualified property improvement with other qualified rental expenses such as cleaning, maintenance and repair costs.

[tagteam]

Read through the following TurboTax help article.

https://ttlc.intuit.com/community/credits-and-deductions/help/what-kinds-of-rental-property-expenses...

In short, you can deduct all expenses related to the rental (including depreciation) for periods when the property was available for rent (even if not occupied by a renter).

With respect to payments, you are almost certainly a cash basis taxpayer, so you will deduct expenses in the year you actually pay them.

[snoopyroc]

Our main residence is 6 miles away from this rental property. We never lived there. My husband goes usually once a week to check on the property, take care of the landscape, make sure everything is OK inside and out, etc. He spent a couple of hours there and gets back to our main residence. Never stay overnight. By the way, can he deduct mileage? I kept track of every single trip he did this year to the property (from our main residence), either for cleaning and maintenance, for showing the house, for welcome the renter and when they left, etc.

The repairs and maintenance that he has done are minors, paint a closet, repair a window, nothing big.

Thank you for your answer

[tagteam]

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@snoopyroc wrote:

...By the way, can he deduct mileage? I kept track of every single trip he did this year to the property (from our main residence), either for cleaning and maintenance, for showing the house, for welcome the renter and when they left, etc.

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With respect to mileage, expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business.

See https://www.irs.gov/publications/p527#en_US_2018_publink1000218991

Cleaning, maintenance, and repairs are generally deductible expenses, but an owner of rental property cannot deduct his/her time in performing those tasks.

[snoopyroc]

But can he deduct the materials? For example when he painted the closet, can he deduct the paint? when he repair the broken window, can he deduct the glass? 

Thanks

[tagteam]

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@snoopyroc wrote:

But can he deduct the materials? For example when he painted the closet, can he deduct the paint? when he repair the broken window, can he deduct the glass? 

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Yes, he can absolutely deduct the cost of materials used for repairs, just not the time he expends in apply them or otherwise effecting the repairs.