When do deductible expenses start?

[Angie DeRubeis]

Are cost of legal fees and renovations before LLC is formed deductible expenses?

[Mark Ernst]

Assuming this is in regards to a rental property and fixing it up...Your pre-rental expenses typically add to the cost basis of the property. Say you bought a house for 100k, then you put 50k into it to get it ready for rent. Your adjusted cost basis of the property is 150k. You can't take the 50k or even a portion of it off your taxes as rental; Repairs, Maintenance, etc.. After the property is rented, then costs start to go into the appropriate buckets and become tax deductible. When you sell it, you would pay the difference on net proceeds, based on your adjusted cost-basis. (the 150k, not 100k)

My understanding and have been in this boat, and done taxes myself and this is what I found. You can and should get tax advice from a professional if it matters.