Is rental property repair cost that is due from the tenant but unpaid deductible as repair expenses?

[kchilaka]

I owned a rental property in 2016 that the tenant caused damage to when he lived there. A portion of the cost for repairing the damages were paid by his rental deposit but there is a substantial cost for repairs that he still owes but has not paid (and has refused to pay so far).  I have hired a collection agency to collect the balance owed from the tenant. 

I have a couple of questions.

1. Let's say the balance is $X. Can I deduct $X as repair expenses for the rental property since the repair cost has been paid for by me , the landlord.

2. Lets say the collection agency manages to get the payment from the tenant in 2017. Will I then just report the collection amount (minus the 50% charges of the collection agency)  as income for the year 2017?

[MaryK1 · Accepted solution]

Yes, you can deduct the repairs as rental property expenses, but if you are able to recover any payments from the former tenant, you would add them as income for 2017 (or the year that you receive them)