In 2021 I purchased building materials for repairs to a short term rental property, but did not complete the repairs in 2021. Can the materials costs be deducted in 2021?

[donmackenzie79]

I purchased building materials needed for repairs to a short term rental property in 2021. However the repairs themselves were not completed in 2021, i.e. the materials went unused that year. Can I still deduct the materials costs since the money was spent in 2021?

[tagteam · Accepted solution]

You can deduct the entire repair job in the tax year in which the repair was made.

[donmackenzie79]

Thanks. Is it permissible to deduct part of the costs in 2021 if the repairs were only partially completed in 2021?

[Carl]

Are these actually repairs? Or does this qualify as a property improvement? It matters.

If it truly is a repair, then the expense is deductible in the tax year it's incurred. If a property improvement, then nothing is deducted "per-se".  It gets capitalized and depreciated over time. Capitalization/depreciation does not start until the tax year the property improvement is placed "in service", and it does not matter in what tax year it was paid for.

If you did the work yourself, be aware that your own labor is not deductible no matter how you look at it.