De Minimis Safe Harbor - before property placed in service?

[Mila F.]

I stumbled over this thread from a few years back on DMSH election for costs incurred prior to placing a property in service. It was a heated debate with no consensus:    https://www.biggerpockets.com/...

What's the interpretation of the codes/regulations today? Can pre-service costs be expensed if they meet the $2,500 threshold? The RE tax professional helping with my returns says it's ok. My gut wants to verify. A bit hesitant to expense most of the rehab costs this way.

[Natalie Kolodij]

There wasn'ta  consensus- 

But 3 RE Tax pros said DMSH doesn't apply before an asset is in service. 

And one said it does. (and I guess your CPA too)

Thomas Castelli who's also a RE specialized CPA just  posted about this topic as well last month and also agrees, not until it's in service. 

But at a surface level: Until a rental is "in service" it doesn't get to write off expenses. Until a business is "open" it doesn't get to write off expenses. 

So how can we elect to expense vs. capitalize something before the business is operating? We can't.