Acquiring rental property to live in

[tacks86]

Client bought a house. The house has been occupied by tenants. The tenants will rent for a few months until the lease runs out. Client will collect a few mos rent. Client will then move in.

I want to advise her to make any repairs in the year in which she moves in. During the year of 'mixed use' she'll be able to deduct a portion of the repairs. Whereas if she pays for repairs in the second year she'll not be able to deduct.

How is my advice? Make repairs in the year of purchase. Would you advise your client to do the same?


thanks


(note that i say 'repairs' and i'm not advising her to build an inground pool.)

[ChEAr$]

It's a matter of timing

Client bought a house. The house has been occupied by tenants. The tenants will rent for a few months until the lease runs out. Client will collect a few mos rent. Client will then move in.

I want to advise her to make any repairs in the year in which she moves in. During the year of 'mixed use' she'll be able to deduct a portion of the repairs. Whereas if she pays for repairs in the second year she'll not be able to deduct.

How is my advice? Make repairs in the year of purchase. Would you advise your client to do the same?


thanks


(note that i say 'repairs' and i'm not advising her to build an inground pool.)

as I'm sure you know. Problem is, when does the clock start and stop?

Assuming this is a bona fide rental and reportable on schedule e (which I wouldn't;
rather report "other income"), any repairs only during the time of rental would be
deductible. Any repairs after rental ceases, even during the first year, are not
deductible.

[taxea]

Acquiring rental property to live in

ChEAr$ is correct. Any repairs made after the tenant contract is up and the tenant has moved are not expensable.taxea

[tacks86]

Thanks to both of you for responding.