Tax deductible? - tenants rented for a month while I started capital improvements -

[Ayoka Moss]

Hi, 

I just want to understand if I bought a property (quad) and received rent while I started the capital improvements .. can I deduct the expenses of the rehab still? This was a major rehab over 6 figures.  Ty and happy to answer more questions.   

[Joshua Thompson]

Hi Ayoka!

Certain cost might need to be capitalized and depreciated over time and given the rehab was over $100,000 I'm sure there will be a few large transactions that need to be capitalized. However, with the property being placed into service it does help your case to allow for certain expenses to be deducted in the current year. Depending on your situation it might be better to elect to capitalize on all rehab expenses and a great conversation to have with your tax professional