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Updated about 4 years ago on . Most recent reply
Tax Benefit for Dec 2020 vs Jan 2021 purchase and expense
I assume this is a simple enough question that experienced real estate investors could answer so I put it in this forum vs. tax.
I have my first buy and hold rental under contract scheduled to close before Christmas Dec 2020. I might be able to push closing until Jan 2021 but not sure if seller would agree. Either way, I won't be able to put the unit in to rental service until after Jan 1, 2021.
I need to install new flooring (~$5000) before putting it in service. Is there any benefit of incurring that flooring expense / capex in 2020 vs. 2021? From what I've read, 100% bonus depreciation extends to units placed in service until 2023. If there is a large benefit, I could get it done in 2020, but would change my Christmas plans.
I'm not able to use passive losses to offset any of my active income.