Inherited home converted to rental

[GTS1101]

I have a client who inherited a home in May 2010. She has been fixing it up replacing windows, carpets, painting, etc. It has a lot of damage and cannot be rented until all the work is done. If she begins renting the property out in Dec 2010 I am assuming that none of her repairs before December would be deductible? They would just become part of the basis? From what I see in the law it has to be available for rent before you can deduct the expenses. Any other ideas on how to write off these expenses? She spent money making energy efficient improvements but it is not her main home so not deductible.

Thanks!

GTS1101

[appelman]

This was discussed at length earlier.

See discussion of "Rental issue" Oct. 30-Nov 1. If I had to boil down that discussion, I would say that capitalization is the way to go. Taxes on the property, of course, can be deducted in the year paid.

[Burke]

It has a lot of damage and cannot be rented until all the work is done.

Your question is answered by this statement. All expenses will be capitalized to basis.