Deducting and Depreciating Expenses for Vacant Property

[rynlee]

Hello, I purchased a single-family home in 2023 that will be rented to a tenant beginning in January 2024.  Turbo Tax tells me that because it wasn't rented in 2023, it should not be listed as a rental.  However, I had many expenses associated with improving and getting the property ready for tenants.  Can any of these expenses be deducted or depreciated on my 2023 return?

[Anonymous_]

Improvements are added to your basis for the purposes of depreciation while typical rental expenses can be deducted when the property is ready and available for rental use.

[rynlee]

Is there a way to report these additions to my basis for the purposes of depreciation in Turbo Tax for 2023?

[Anonymous_]

Yes, but if you made the improvements before the property was available for rental use, you would simply add the cost of the improvements to your purchase price.

Otherwise, you would add the improvements as separate assets (or as one asset if the improvements were all part of the same renovation project).