We always reconstruct the financials on properties we are analyzing. 

Builders risk coverage is generally used for new construction or very large reconstructions.

https://www.wave3.com/2023/12/12/reconstruction-project-rive...

And to answer your question about building insurance - also included in the HOA fee - it's necessary to ensure the building can be reconstructed in the event of a fire, major hurricane, etc. 

Hi all,I am a new investor in the Denver metro area and am doing a bit of work for a home that I bought a few months back (demolition of a back area of the house and its subsequent reconstruction).

This is tough to do.Sec. 469(c)(7)(C) provides, "the term 'real property trade or business' means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business."

If they have sat uninhabitable for an extended amount of time there might be a reason why, as most owners would work to get through the reconstruction process as quickly as possible to limit the amount of lost income. 

It's a matter of interpreting the definition of "real property trade or business": "...any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage..."

Looking for examples that qualify or examples in these 11 categories below of “real property trade or business is any real property trade or business that is involved in:” - development, redevelopment, - construction, reconstruction, - conversion, - Acquisition, brokerage - Rental, leasing - operation, management, Trying to gain a more clear and detailed understanding on that part.

Here's the issue: (1) the house needs repairs, plumbing, roof, electrical and major reconstruction