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Updated almost 7 years ago,

User Stats

6
Posts
3
Votes
Lizanette Velez
  • Rental Property Investor
  • Fort Lauderdale FL
3
Votes |
6
Posts

Tax Question - Improvements and "Placed in service" date

Lizanette Velez
  • Rental Property Investor
  • Fort Lauderdale FL
Posted

HI everybody! 

Newbie here from Maryland, loving REI everyday more!!

I read some previous posts on this topic but still somewhat confused.  (I hope to add a CPA to my team pretty soon).   I have two scenarios that will appreciate any guidance the BP community can provide:

Scenario 1:

I bought my first rental property via Internet auction on January 19 this year.   The prop had no appliances, no carpet, and a mold issue that required replacing the water heater, pipping, and some walls.

Closed on the property March 9.  Cash purchase using my savings, line of credit and credit cards

Between March 7-15, I bought at the local HDepot the water heater, the drywalls, the appliances, flooring, fixtures, etc.  Paid with my personal credit card.   We are installing the water heater and the drywalls this weekend.  Carpet and flooring and appliances will be installed by next week. Painting the week after.  (We are doing the rehab ourselves).

I'm listing the property in Craigslist today March 16, with an available for rent date of April 1.  Im waiting on finishing all repairs to request the rental license  (by the end of next week).

Question - For 2018 tax purposes (already planning!),  is the "placed in service" date today (when Im listing it) or another date?  If today, can I still claim as improvements (or capital expenses) those costs that I have already incurred to get the property ready even before the listing is up?

I have saved all receipts and Im keeping track of all costs and events, but want to make sure which dates I must keep track off. 

Scenario 2 - I moved out of my home last Summer  and decided to rent it out.  I replaced full carpet in October to get it ready for renting.  I requested and paid PG county rental license effective January 6 (this year). Listed property for rent on Craigslist on Feb. 27 and rented it out March 4. 

Question - what would be the "placed in service" date for this property for tax purposes next year?

Your guidance will be greatly appreciated. 

Liza

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