Rental property: are these costs added to basis or Rental expenses? HOA transfer fees, property taxes for next few weeks. Property not put in service on day of closing.

[Small-Time-Landlord]

It seems that most advice puts property taxes as rental expenses but only once the property in "in service", i.e. available to be rented.  On the day of closing this is not often the case, yet county taxes are still collected and due.  So how do we account for these in TurboTax?

Same with HOA fees.

[PatriciaV · Accepted solution]

Expenses incurred prior to a rental property being available for rent are not deductible. Instead, these costs may be added to the basis of the property (capitalized for depreciation). You may either include these expenses as "closing costs" for the property itself, or add them as a separate rental asset.