Can you count expenses (furniture) from the previous year before you started your property mgt business in 2021

[carolb6]

I purchased beds and dressers for example for my start up but we didn't actually take a renter until Jan 2021

[tagteam · Accepted solution]

With respect to assets (real or personal property), cost recovery does not begin until the assets are placed in service.

[Carl]

Can you be more specific on just what your property management business is/does?

Do you own the property and rent it out? If so, is this long term rental that a renter would call "home"? Or a short term vacation rental like you would get on VRBO or AirB&B?

Maybe you manage property that others own?

I ask this,because based on my interpretation of what you posted, I'm not clear if this is a SCH C business or SCH E business. This matters for taxes and can also affect (in some instances) how you treat assets such as furniture for the property being rented out.

[tagteam]

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@Carl wrote:

...I'm not clear if this is a SCH C business or SCH E business....

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It actually makes no difference since assets (such as furniture) would not be deducted (directly or via a cost recovery method) until the assets were placed in service.