Remodel, Invoiced, Depreciated, No Contractor to pay?!?

[mgc6288]

Last September I had a rental unit remodeled and the contractor invoiced me for a little over $14k.  

The contractor never gave me a W-9 and has since disappeared.

The property was placed into service on October 1, 2023.  

Without payment, nor even knowing when payment will be accepted, do I start the depreciation last October, do I start once payment has been rendered after W-9, or am I just losing out on this depreciation until I someday can pay him?  

[DavidD66 · Accepted solution]

You should place the improvements in place and start depreciating the cost as of October 1, 2023.  I think you can reasonably assume that the contractor will reappear and want to get paid.  

[mgc6288]

Ok.  He also remodeled a second unit but has never invoiced me for it but I do have the estimate in writing for a little over $15k.  

I could use the estimate but if his final number is different then I'm in trouble.  

If I choose not to depreciate until he actually notifies me the amount by invoice then is this first year lost or do I just start the depreciation from when I found out the final balance?  Unit has been in service since November.

[PatriciaV]

As DavidD66 said earlier, use the estimated cost for the renovation and begin depreciation on the date the unit was placed in service. If the contractor comes back with a different number that you actually pay, you can add another improvement asset to cover the difference.