Special Assessment on Condo Converted from 2nd Home to Rental

[Mike Stephens]

So an interesting tax situation here with a second home converted to a rental, and I can’t seem to find the same question in the forums (a first!).

I have a condo that was previously a second home.

- February I became aware of a significant special assessment coming ($8k).

- May I received the invoice due by August 30th.

- July I listed the unit for rent. I placed a tenant in August and they moved in Sept.

- August I paid the assessment

Is the special assessment eligible as an expense against the rental income since it was paid AFTER the property was marketed for rent, and the actual repair work on the building started after the tenants moved in? Or is it based on when the expense was reasonably known to be forthcoming?