Converting Primary Residence to Rental

[Dan Buchta]

I am in the process of finding a new primary residence and I plan to rent out my current home once I have moved. There are a few things that I want/need to do to my current home before renting it out such as:

- Painting & Spackling

- Replace a storm door

- Install Deadbolts & Door Viewer

- Other miscellaneous items 

I'm estimating about $1000 of expenses however what I really want to know is if I can deduct these expenses and the time it takes to perform them if I do it while living in the house? If I can't, is it worth waiting or should I just do them now? I realize I should ask a CPA but I wanted to hear if anyone had insight first.

[Derek Felch]

I am guessing you will end up with some good responses on both sides of this question...

When we converted our personal residence we tracked the improvements we made, prior to it being available to rent, and capitalized them (about 5K).  Once a property is available to rent (being marketed for rent), those items could be considered expenses and taken against your rental income.

Some tax decisions come down to your (or your tax preparers) ability and comfort level in defending your decision should it be questioned by the IRS.   I always lean on the overly cautions/conservative interpretation, but if I am honest, my tax preparer rolls his eyes at me from time to time.  $1000 is probably not going to make a huge impact on your taxable income either way you choose to do it, however, addressing the items you mention prior to showing your rental, will probably help your home make a good first impression to potential tenants.