Depreciate if no income?

[Aaron Smith]

Hi BPers,

My brother @Joshua Smith has a property which he purchased in May 2017, but has been design and in permitting (a complete nightmare) for the remainder of the year. Therefore, it hasn't made any revenue, as in rent, for the year of 2017. We're wondering, can the asset still be depreciated if it has produced no income for the year. Furthermore, if it can be, can we add things like architect fees, condo conversion fees, permitting fees to the basis?

Thanks in advance,

Aaron

[Paul Caputo]

Depreciation starts when the asset is "placed in service" which for a rental property is when it's ready to be rented. Sounds like you're not there yet so there wouldn't be any depreciation yet.