Can I Deduct STR Expenses in Year Before Property is Listed?

[David Ruiz]

Hi everyone,

My wife and I formed an LLC in late 2024 for our short-term rental business, and we've been prepping a property that we plan to list in 2025. The business is legally formed, we've started organizing finances, and have been incurring expenses, but the property was not placed in service in 2024—it wasn't available for rent yet.

My question is: Can we deduct any of our 2024 startup expenses on our 2024 tax return, or do we have to wait until the property is officially placed in service (i.e., listed and ready to receive guests)?

Some examples of 2024 expenses:

• • Startup and administrative costs: LLC formation
• • Property preparation: Furnishings, appliances, minor repairs, upgrades
• • Professional services: Consultations with CPAs, contractors
• • Tech and software: Website domain and hosting, Google Workspace, QuickBooks subscription

I’ve read IRS guidance on startup costs, but I’m still unclear what falls under it and how it applies when a rental hasn’t begun yet. Would love to hear how others have handled this or if you’ve seen clarity from your tax pros.

Thanks in advance!