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Tax Law (Questions About Taxes)/Property for rent not ready yet... lots of expenses

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Question
Dear John,

I own a townhouse that's been empty since 2011. I've been repairing it as time permits b/c I have a tight schedule among work, my other property, family, etc. I'd lived in it since 1992, so quite a few things gave up in the last 2 years, and needed to be fixed. The fact is that I have a pile of receipts for the repair expenses, but haven't been able to get it ready and rent it yet.

How can I declare these "repair for rent" expenses in my income tax if I don't have actual rental income in 2013?

Is there a way to declare the expenses incurred in the previous years 2011 and 2012 in my 2013 income tax?

Thank you in advance.

Sincerely,

Richard

Answer
Richard,

Thanks for your question.

Since this is basically a rehab to prepare it for rental the expenses you have incurred should  be capitalized, added to basis, and depreciated.

Any items that might be expense can only be deducted in the year paid.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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