Expenses for acquiring rental property - Help

Collapse
X
 
  • Time
  • Show
Clear All
new posts
  • thomtax
    Senior Member
    • Nov 2006
    • 1276

    #1

    Expenses for acquiring rental property - Help

    Client made two trips to another state to look at properties for suitability and one trip for closing on the property decided upon. I have looked at TTB and as I understand the explanations, the start up cost for rental property is the same rules as for business start up costs. On page 8-17 it states:

    Start-up costs include:
    Analysis or survey of potential markets, products, labor supply, transportation facilities, etc.
    Expenses incurred while investigating the purchase of a business.

    Also on the same page it shows that the 2011 Start up costs limit is $5,000.

    Am I understanding correctly that the expenses are deductible as start up costs? Do I put this on Schedule E and list as start up costs?

    Thanks for any and all guidance.

    LT
    Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".
  • taxea
    Senior Member
    • Nov 2005
    • 4292

    #2
    You could or as travel expense if the Sch E has income.
    Believe nothing you have not personally researched and verified.

    Comment

    • ChEAr$
      Senior Member
      • Dec 2005
      • 3872

      #3
      Originally posted by taxea
      You could or as travel expense if the Sch E has income.
      oh now, I don't think so. These expenses are incurred/paid before rental begins, and hence fall into the category of capital expenditures. So, either add to basis or property, or, if permitted as OP has found, amortize separately and/or deduct as allowed.

      They have nothing to do with rental after acquisition or while rented thereafter.
      ChEAr$,
      Harlan Lunsford, EA n LA

      Comment

      • thomtax
        Senior Member
        • Nov 2006
        • 1276

        #4
        Thanks for the replies.

        Please tell me if I am wrong, but the way it looks to me is that they could also take per diem for this.

        LT
        Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".

        Comment

        • Gretel
          Senior Member
          • Jun 2005
          • 4008

          #5
          If you mean per diem for meals, yes.

          Comment

          Working...