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.
Vacant while listed for sale. If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses."
all expenses paid would be eligible under IRC 266 to be capitalized (add to tax basis). this code section requires that an election be included with your return - so it would have to be filed by mail. otherwise, you don't deduct them anywhere - not a rental expense, not a sales expense. expenses paid from the beginning of the year to the date you put it up for sale are rental expenses. however, closing costs are sales expenses (expenses only incurred because you are selling) such as any sales commission, legal fees, title transfer fees. home inspection fee, home warranty fee.
