Timing of Purchasing Tools/Materials for STR Rehab...Taxes

[Dave Price]

I may have interpreted this incorrectly but I was reading on this forum some people saying that you cannot deduct anything on your STR until after it is technically available to rent because until that point it's not technically a business.

Doesn't sound right to me because if you have to do a rehab on it and have to purchase tools/materials to accomplish that, then this would obviously be done prior to the property being available to rent which would mean you wouldn't be able to deduct those tools/materials used for the rehab?  

Would a way around this be to advertise it for rent as soon as you buy it and while you are doing the rehab?

[J Zev J.]

Hi @Dave Price - The rules are nuanced as all IRS rules are. If you check out IRS publication 535 and search it for 'start-up costs' you'll find some sections that have good information and probably answers to most of your questions (at least in the abstract). Advertising doesn't mean you're open for business...I wish it was that easy :)