Property in service, and how to deduct repair costs now?

[Paul Winka]

I just bought a house in my name that I intend to rent out. I paid $46K for it and closed on 14 Nov. It needs around $35K in repairs, and those repairs are ongoing now and should be finished by 25 Dec. I would like to write off the repairs to this house this year. The intent is to rent out this house. 

Is the house "in service" now, or can that only begin once a certain milestone is reached, such as attaining an occupancy permit or a lease start date? What could I do to deduct these expenses this year? 

[JD Martin]

No, the depreciation is what you paid + what you put into the house as capital + your acquisition costs. You may have $80k in basis when you are done if you capitalized everything on the rehab, and you are going to end up capitalizing a lot of it because of the house value, but you can't just pick your own number. 

PS: There is no forced equity until you sell. You don't get to deduct hypothetical equity.