Rental Expenses - Year of Sale

[Nashville]

Taxpayer sells a rental residence in July of 2009.

He has had the home for sale for nine months, and during no part of 2009 was it occupied by renters, hence no rent revenue. However, his normal expenses continued, insurance, maintenance, interest, etc.

How are the expenses recovered? Is he entitled to file expenses on Sch E even though no rental revenue and no attempt to even have a renter?

[S T]

Maybe

Snags,

Would this work

From Pub 527 page 4

Vacant while listed for sale. If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving or maintaining the property until it is sold

Sandy

[Snaggletooth]

Good Cite

but doesn't tell HOW to report. For example, one possibility might be a Sch E with no revenue. Another possibility may be to roll these expenses into the basis of the property when sold.

I'm assuming Sch E is the right choice. If operating expenses are deferred because of Form 8582, then I suppose they would THEN become part of the basis.

[dyne]

Yes, simply enter the expenses on schedule E.