topic When do i take the deduction? in Get your taxes done using TurboTax

When do i take the deduction?

curioustaxpayer — Tue, 24 Feb 2026 07:25:35 GMT

Scenario

I purchase a property in October of 2022 for the purposes of renting it.
I spend quite a few months fixing/rehabbing it and making it suitable for renters
It is made available for rent in March of 2023
It is leased up in May of 2023 so the property has had no actual rental income for 2022 because it was being rehabbed..
For the purchase, and during my time holding it for the last few months of 2022 I paid mortgage interest, origination points on the loan, home owner taxes, utilities, etc.

Question:

When can I claim the expense / deductions for the funds spent in 2022 to acquire and hold the rental property while it was being rehabbed for rent? Do I take those deductions when I file my 2022 taxes or do I take those deductions when I file my 2023 tax return since the property was not put "in service" until 2023 even though I purchased it and had expenses in 2022?

Re: When do i take the deduction?

Anonymous_ — Mon, 11 Sep 2023 14:25:52 GMT

You can't deduct typical rental real estate expenses (utilities, repairs, etc.) until the property is placed in service as a rental.

You can add improvements to your basis for depreciation and you can also deduct mortgage interest and property taxes on Schedule A (both are subject to limitations).

Re: When do i take the deduction?

Critter-3 — Mon, 11 Sep 2023 15:47:26 GMT

You can't deduct typical rental real estate expenses (utilities, repairs, etc.) until the property is placed in service as a rental HOWEVER these expenses can be CAPITALIZED if you make a timely election.

Re: When do i take the deduction?

curioustaxpayer — Mon, 11 Sep 2023 20:07:38 GMT

Thank you very much.