Converting Primary Residence to Investment Property

[Nathan Roberts]

I converted a property from a primary residence to a rental located in California in 2022. The date of conversion is 5/29/22 which reflects the first day it was advertised online for rent. After listing for rent, I started work on capital work items such as new exterior paint, replacement shower door, and replacement carpet so I can claim it on my 2022 Tax Return. In addition, I am claiming all typical rental expenses such mortgage, taxes, insurance, maintenance, etc. My understanding is that after I list the property for rent its fair game to claim all capital items and expenses. Is there any thing I am missing?

[Linda Weygant]

You're about 90% there.

The In Service Date is the date the property was ready and available to rent.  So listing it, then beginning an exterior painting project would be acceptable because this project does not affect the availability of the home.  People can live in it and aren't affected by the project.

A replacement shower door is also likely to be ok because it does not affect the availability of the home - IF THERE IS ANOTHER SHOWER THAT CAN BE USED.  In a one bathroom home, this blocks one of the items of whether a home is livable or not.

Carpet is the area I'm struggling with.  Could you install the carpet around a tenant's furniture?  Is the home really available for rent if people can't move their items in.  I'd say this project invalidates the declaration that the house is both ready and available to rent.