I currently live in a SFH and am in the market for a duplex to move into one side and turn my SFH into an income property. Since I am having work done to prepare my house to be rented (plumbing) can I deduct that expense on this years taxes? I am hoping to move into a duplex within the next couple months.
I'm no tax expert, but if it is marketed for rent when you do the work I think there is more leeway. If it is not yet 'in use' as a rental, then no. I believe 'in use' counts if it is available for rent. Check with your tax pro though.
Where I live you can take the deduction if it's a business expense.
If you are fixing it for business reasons, rent it out and take the deduction.
If your fixing it to continue to live in ( even for a few more months), I would leave it alone.
Repair - The cost of a plumbing repair is not deductible as a maintenance and repair expense if your living in the house at the time of the repair. If the home has not yet been vacated by you and advertised for rent, then it has not yet been converted to rental use and repairs are personal not rental expenses.
Capex - If the plumbing work is an improvement to the home (does it increase the value of the home or extend it's useful life) then the cost of the plumbing work is added to the cost basis of the home. This could be deductible when you place the home into service as a rental as it will become part of the home's depreciating basis. When determining the depreciable value of the home, you need to identify the lower of a)The purchase price you paid plus improvements to the home or b)The home fair market value on the date it became available for rent. It is possible for the plumbing work be a component of "A."
The simple and easy answer, if your still living there, its not deductible.
Page 15 of the below link may help:
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