Hi,
I bought a house last part of 2010 (not the one with the partners) and spent money fixing it up. It rented Feb 2011. Will my expenses in 2010 simply go toward my cost basis in the house (since I had no rental income)? In other words, it won't be included on my taxes until next year (2011's taxes), right?
Thanks again, Jeff
If the house was ready to rent and you were trying to rent it in
2010 then by all means, deductions are taken in 2010. Else wait until 2011.
I don't think this answer is correct. "Fixing up expenses" one incurs prior to the house being made available to rent for the first time get capitalized (adds to cost basis). Once the house is available to rent, "fixing up expenses" that are not considered capital improvements may be deducted as an expense. The date the house is first made available to rent is also the date that depreciation starts.
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