Deductions if rental property vacant

[codad4x]

My rental house (previously rented) was vacant for a few months so I could make repairs, including replacing the rotting porch roof and beams, patching drywall, painting.  Can these expenses be deducted even though it was not available for rent while the work was done?

How do the vacancy months impact the other deductions like insurance payments, utilities, etc?

I also remodeled the bathroom and improved the landscaping during that time, but I assume those would be improvements added to the cost basis.  Is that correct?

[PatriciaV · Accepted solution]

Yes, per the IRS Pub 527: Vacant rental property.   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you cannot deduct any loss of rental income for the period the property is vacant.

Yes, capital improvements that add to the value of your rental property are normally depreciated. You can see a list of typical improvements here: How do I handle capital improvements and depreciation for my rental?

However, you may be able to write off these costs if you qualify for the Safe Harbor Election for Small Taxpayers. TurboTax will ask you about this election under the Assets/Depreciation section of your Rental Property. If you choose this election, you can expense up to $10,000 in costs that would otherwise be depreciated over a very long time.