- If a landlord purchases a piece of property but must repair it before he can make it available for rent, his expenses on the property are not deductible during the repair period, according to Easy Rental Tools. Rental expenses are only deductible when the property is available for rent or is actively being rented; expenses in between when the landlord purchases the property and when he makes it available are not deductible.
- If you have rental property that is currently available for rent, you may deduct rental expenses even if the property is not currently being rented. These expenses include your mortgage and any repairs or upkeep you need to make on the property while it is vacant. The IRS doesn't care about whether the property is actively being rented as long as you make it available to rent and attempt to find tenants.
- You may not want to purchase a property for rental that requires a lot of repairs or remodeling before you can rent it, as you will not be able to deduct any of your rental expenses until you are ready to rent the house. If the house takes several months to repair or remodel, you may be paying a sizeable mortgage bill that you are not getting back through rent or tax deductions.
- If a property is vacant, you cannot deduct the loss of rental income from having not rented the property. For example, if you rent a property for $700 per month and it is vacant for three months, you cannot deduct $2,100 for lost rent during the time that it is vacant. However, you can deduct the cost of repairs to the property while it is vacant as long as you have made the property available for rent.
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