Will I get any deductions for 2017 if I paid cash for land and mobile home to rent. I spent another $20K making it livable. I did not rent property in 2017

[chris22]

The home was available to rent on Dec-1 but I did not find a tenant until January 2018.  So I had no income in 2017 but a lot of expense.

[DianeW · Accepted solution]

Yes.  The date placed in service and made available is the year you begin to deduct expenses even if the tenant was not obtained until the following year as you indicated.

Capital improvements become part of the cost of the home (part of the mobile home and attached to the structure).  This will be depreciated and expensed equally for each month in service each year.

Other expenses, such as appliances, can be deducted using the "DeMinimis Safe Harbor" which allows you to deduct the full cost in 2017.  TurboTax will ask the questions during the rental activity entry.

Caution:  When you begin to receive rent you may want to choose to depreciate versus expensing them to offset the income next year. It's strictly up to your discretion.

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