Duductible Expenses
I just bought a vacation cottage that I plan to rent out. The rental season is eight weeks long, during the summer. The water gets turned off before the first frost and it turned back on after the Spring thaw.
Before it is "rentable", I need to rehab it which means I will likely miss this rental season. My question is: Can I deduct my expenses during this tax year? Also, can I deduct my lost rental income for this season? Thanks, Cataman
Rehab costs are added to your cost basis, not deducted or expensed. You recover your rehab costs through depreciation once you put the property in service.
You can deduct property taxes and investment mortgage interest on your Schedule A if you itemize your deductions. After the property is put in service as a rental, these expenses will be claimed on Schedule E.
The income you failed to earn is not a tax deduction, just a missed opportunity.