How many days did you rent your property ?
- Are we count only days that rent was collected ? How about days when property is in transition (one tenant moving out, repairs and marketing take place etc.). Are expenses at that time deductible ? Is property still rental property ?
2.If at any point I'll convert rental property to personal residence, on what day by IRS rules it's became personal residence (move in, finish all repairs to make it livable, are those expenses still deductible ) ?
Answers
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Hi!
The property can be considered "rented" on the days the property was ready to rent out or was currently being rented. During transition periods between tenants, the property can be considered rented if it was ready for renters. For example, the days you took to make repairs wouldn't be considered rental days, but the days you were marketing it and the property was ready for tenants would be.
Expenses you incur on the property during days that aren't rental days are not generally deductible. Some upgrades you make during these days may be considered depreciable assets on your Schedule E, however repairs and maintenance are not deductible.
As soon as the property is no longer being rented, it is considered a personal property rather than a rental property. Upgrades to these properties are generally not deductible, but the IRS offers a home energy credit for home energy usage improvements. -
Hi. Yes. Thanks for clarification. Have other issue - net losses of $4150 cary forward from 2021. How and when to deduct them ?
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Your losses on a rental will continue to be carried forward until you have income that will offset the loss from this property or other passive income (typically other rental income), or when you dispose of this property, the entire loss that hasn't been used will become a nonpassive loss that can be used to offset other nonpassive income.
