Date: Thu, 29 Jan 2004
I lived in a residence for two years, until October, 2003. From October, 2003 through January 15, 2004, I had expenses to fix and maintain the property. On January 20, 2004, I leased the property.
Should I deduct my expenses on my 2003 income tax return or my 2004 income tax return?
Date: Mon, 02 Feb 2004
Repair and maintenance expenses are deductible when paid starting the date you make the house available for rent. That is also the date you start depreciating the residence. Improvements like carpeting, remodeling the bathroom or new appliances must be depreciated, not deducted. Remember the deductions may be subject to limitation under the passive activity loss rules. See Publication 527, Schedule E and instructions, and Form 8582 and instructions.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised
that any written tax advice contained on this website was
not written or intended to be used (and cannot be used) by any
taxpayer for the purpose of avoiding penalties that may be
imposed under the U.S. Internal Revenue Code.