Deductible Expenses when improving portion of property

[Joel163]

I currently have a portion of my property listed on Airbnb, but I am repairing and improving the remainder of my property while I live in it.  Can I claim expenses on the unlisted portion of my property before it is put in service?  Example is painting and landscaping portions of the property unlisted on Airbnb.  

Similar question regarding another property I am rehabbing.  Can I claim expenses from the 2018 year before it is put into service? ie listed on Airbnb. 

Thanks for your help.

[Susan151]

@Joel163 Painting is considered maintenance; not a capital improvement. I have never landscaped a darn thing in my life, so have no idea what the IRS rules are in that regard.

[Linda108]

In the Help Center under taxes, you can find an excellent article developed by the Accounting firm of Ernst and Young about allowable deductions for the US taxes.

I have a private room and use the per cent of square feet devoted to guests to deduct expenses related to maintaining and improving the property.  

Hope this helps!

[Pete28]

You need to be using it as part of the rental to claim it either as an expense or depreciate it.

If it's part of the same house and is of benefit to both I would pro-rate based on the portion you rent (eg repair the roof, plumbing, heating etc). Maybe you could do landscaping that way since it benefits both.

You can of course claim one off expenses against rental income assuming it is applied to the rental, new furniture, carpet, kitchen etc is over 5 years, the structure is 27 years. Maybe get an accountant for first year rerun - then you basically follow the same pattern each year 🙂

[Joel163]

Hi Pete, 

Thanks for the response.  I understand the concept of proration, I think this question is a little different.  At what point in the process of prepping a property do you claim expenses?  For example if you are buying furniture for a property 3 months before it is rented, wouldn't you claim mileage for the trip to the store even though you haven't put the furniture to use yet?  Similarly, why wouldn't you expense things like new paint and fixtures just because that room is in prep mode and hasn't been put to use yet?

Perhaps this is a question for an accountant.  Appreciate everyone's thoughts and attention.  

[Pete28]

You can't claim until you have rental income to claim against  so it would need to start from when you are complete.

It took me over 2 years to get a rental property built and cost $200k, I couldn't start to claim any of it against my income until it was rented out.