Property not "in service" in '16. Can I expense taxes & interest?

[Rick Jones]

I know that this can be done but not sure how how to do it. I want to write off property taxes and mortgage interest paid for property purchased in 11/16. Its still undergoing a rehab so its not "rent ready" yet. I know that the rehab expenses are added to the basis once it becomes rent ready but what about property taxes, mortgage interest, and utilities paid in 2016? Thanks!

[Jim Kennedy]

You can write off taxes and interest for a second home just like your primary residence, but it has to be a second home - like a vacation home. You are limited to interest on a million dollars of mortgage indebtedness and $100K of lines of credit against them.

Oh snap, I just re-read your post and it appears these are rentals. Please disregard my comments in the previous paragraph. While the facts I stated are correct under the Internal Revenue Code, your rental does not seem to be eligible under your facts and circumstances. 

Jim Kennedy, CPA