Skip to content
×
PRO Members Get
Full Access
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime.
Level up your investing with Pro
Explore exclusive tools and resources to start, grow, or optimize your portfolio.
10+ investment analysis calculators
$1,000+/yr savings on landlord software
Lawyer-reviewed lease forms (annual only)
Unlimited access to the Forums

Let's keep in touch

Subscribe to our newsletter for timely insights and actionable tips on your real estate journey.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Followed Discussions Followed Categories Followed People Followed Locations
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 6 years ago on . Most recent reply presented by

User Stats

7
Posts
1
Votes
Libo L.
1
Votes |
7
Posts

start up and tax implication

Libo L.
Posted

Hi, I am a rookie and would appreciate very much some help with preparing my 2018 taxes. I imagine many folks who start out  have similar questions and experiences. 

In December 2017 and early 2018, I looked at some houses in a different state with the intention to buy one and rent it out right away, which led to purchasing a rental house in February 2018, and after some repair and renovation, I placed my first for-rent advertisement in March 2018. 

Questions: 

1) How should I treat my expenses in December 2017, which included travels, home inspection of a house I didn't end up buying? Should I include those expenses towards calculating my cost basis for purchasing this property (therefore, they matter only when I sell the property in the future, but don't matter for figuring out my 2018 taxes)? 

2) From January 1, 2018 but before purchasing the property in February 2018, I also had some expenses for activities which directly led to the purchase, including travels, home inspections, etc. Can these expenses be treated as start-up expenses that I can deduct for my 2018 taxes? Or do they have to be treated as part of the cost basis for purchasing the property?

3) For purchasing the property itself, I had the usual expenses associated with buying a home, such as appraisal fee, home inspection, title insurance, real estate transaction tax (recording fee and stamp taxes), load application/administration fee. Do I treat these expenses as part of the cost basis for purchasing the property, or do I treat them as part of the start-up expense that I can deduct for my 2018 taxes? 

4) After purchasing the property in February but before advertising it for rent, I had expenses in getting the house ready for rent, such as painting, new carpeting (not the entire house but a few rooms with worn and dirty carpets). Are these expenses part of the cost basis for purchasing the property (therefore not deductible for 2018 taxes) or part of the start-up expense that I can deduct for my 2018 taxes? 

I don't have much time left before April 15, would very much appreciate your input. 

Thank you.

Libo

Loading replies...