Rental Property Tax Deductions first year in service.

[Gilda Sanne]

I purchased a mobile home out of state a couple years ago and decided in 2023 to remodel and get ready to rent. I rented it on December 1, 2023. Can I deduct any expenses incurred throughout the entire year 2023 for that property such as utilities, insurance, repairs, mileage, maintenance and improvements? The total for all these expenses were approximately $18k.

Thank You.

[Nathaniel Quesenberry]

Gilda, 

All expenses paid after the property was ready for rent would be deductible as a business expense. 

All improvements would be added to the cost of your property and depreciated over 27.5 years.

Any interest or taxes paid on the property for the full year are fully deductible. 

All other expenses that were before you had the property ready for rent would be considered start-up costs and would have to be amortized over 15 years, but there is an exception that would allow you to deduct up to $5,000 in the first year under IRC 195(b).