Rental Property Question

[ETax847]

Client is fixing up his condo to rent out as of January 1, 2015.  Are the expenses incurred this month to prepare the condo for rent deductible on his 2014 return?  Thanks!

[Jack from Ohio]

Client is fixing up his condo to rent out as of January 1, 2015.  Are the expenses incurred this month to prepare the condo for rent deductible on his 2014 return?  Thanks!

Amortize it as start-up costs (15 years) in the year that he makes the condo available to rent.  If it is available Jan. 1, 2015, then start up expenses for 2015.

[michaelmars]

Not saying Jack is wrong but I would think its depreciated over macrs lives once he starts renting, not 15 years amort.

[SaraEA]

I never heard of start-up costs for a rental.  Expenses incurred before the unit is available to rent are capitalized.

[leg]

if  you have not yet started collecting rent,you cannot deduct expenses

[jklcpa]

if  you have not yet started collecting rent,you cannot deduct expenses

 

^ That is incorrect.  Ordinary and necessary expenses for managing, conserving, or maintaining the rental property are deductible from the time it is put in service and available for rent.

[DevM]

As it is originally posted it will not be put in service or available for rent until January 2015, No expenses should be capitalized.

[Pacun]

if  you have not yet started collecting rent,you cannot deduct expenses

 

I think "collecting rent" = putting it in service.

 

I have never seen a landlord allowing people to live in the condo without collecting rent first. So colleting rent is never after putting it in service.

[jklcpa]

I think "collecting rent" = putting it in service.

 

I have never seen a landlord allowing people to live in the condo without collecting rent first. So colleting rent is never after putting it in service.

 

 

In service date is the date it is available for rent, whether it is rented or not.  Once it is available for rent, expenses may be deducted.

[Jack from Ohio]

In service date is the date it is available for rent, whether it is rented or not.  Once it is available for rent, expenses may be deducted.

This is correct. 

[BulldogTom]

As it is originally posted it will not be put in service or available for rent until January 2015, No expenses should be capitalized.

I don't think this statement is correct.  Expenses to get a property ready for rental activity are not currently deductible, but can be capitalized and depreciated over the life of the property.

 

Tom

Newark, CA

[DevM]

I don't think this statement is correct.  Expenses to get a property ready for rental activity are not currently deductible, but can be capitalized and depreciated over the life of the property.

 

Tom

Newark, CA

My apologies. Should have No. Expenses should be capitalized.

[ETax847]

thanks guys

[Terry D EA]

I know I am chiming in here a little late but the expenses to prepare the property for rent are capitalized and the depreciation begins once the property becomes available for rent and not when it is occupied.

[kcjenkins]

My apologies. Should have No. Expenses should be capitalized.

Ah, the importance of Punctuation! 

 

[michaelmars]

UNLESS YOUR NAME IS DAHMER