Plus, if it's for anything other than a liability claim you will be responsible to pay your deductible, which is usually $1,000 or more.

If we do the repairs in 2020, but don't convert to rental use until 2021, do we miss out on deducting (and depreciating) the rehab expenses? 

So much required for security deposits, it is a bit of headache for something that doesn't generate revenue.Depending on State you might need to deal with:Separate bank accountInterest PayableReturn on timeSend all information about security deposit deductions to avoid liabilityApplying security deposit for rent and then monitoring the payback periodAccountingRE: Accounting, when I was managing about 30-40 security deposits a month, my team did the following:1.

@Vanessa FrancoAs a landlord, I assume you know that rental expenses (maintenance costs, property taxes, insurance, mortgage interest, depreciation, etc) are deducted from gross rental income to come up with net taxable income.

The IRS says your building is slowly wearing out, so just like they allow you take any other legit business expense and deduct that from your income, so too they have allowed REI's to gradually take the total expense of purchasing a piece of real estate and deduct that from our income. 

Give him a notice that if he doesn't complete the work by a specific date that the work will be completed without him and the remaining funds will be deducted from his contract....

Possibly investment in another small rental property to help with tax deduction. 

Get a plan with a high deductible to keep the monthly payment down. 

Certain expenses you pay to obtain a mortgage on your rental property can’t be deducted as interest.

The issue comes in that I need to make those repairs, but can I deduct that money from the security deposit.