Subletting Expense deductions

[Jason Allen]

I am subletting a property that I am planning on purchasing the set up where instead of any type of security deposit I am re-having the property which is necessary before I rent it out.

I will have about $20,000 in expenses all before I purchased the property. The current owner is letting me take over the property as a tenant as long as I pay the water bill and the mortgage payment on it and whenever I decide I can purchase property for the balance of the mortgage  they are in no hurry for me to purchase the home as long as the mortgage is paid. 


My questions are;

Do I have to take expenses as a deduction in a year in which they occurred even if I do not get income until the following year  

I have other rental property, but my taxable income on them after expenses is only gonna be about $5000 So is there anyway to roll over expenses to the next year since I cannot deduct the remaining 15,000 and expenses against my W-2 income?

If not, should I sell stock that I have that has capital gains that would be due on it and offset that?

Can or should I deduct the expenses as part of the cost basis of the home when I purchase it? I prefer not to do this just because of recapture when I sell the property.

If I phrased anything in a confusing way or more details of necessary to answer, please feel free to ask me any questions.


Thank you so much for any help or direction you could give me