Can I deduct inspection fees on rental we didn’t buy?

[Dan Hess]

My wife and I are looking for our first rental and went under contract but it fell through. So two questions:

1) Can we deduct inspection fees?

2) Can we deduct inspection fees for a home we didn’t end up purchasing as a rental?

We have not set up an LLC or S Corp at this time.

Thanks

[Natalie Kolodij]

You're not in business yet is what Russel is saying. 

To the IRS you're in business once you have an active rental- no rental, no business, no business to deduct this against. 

Track all expenses at this cost as they can be dded to your basis/cost of the rental you do acquire. The IRS looks like an asset's cost as ALL costs it took you to get it.