Seeking advice on tax deductions for STR that's under construction

[Will Toress]

Hi all, been reading a ton about taxes related to STRs but still have some questions. I bought the property in 2022 with the intent of making it a STR that year. However, when starting construction, we found extensive hidden damage that extended the rehab timeline and budget considerably.

Finally, in late 2023 we are nearly ready to go live. So are any of the construction costs tax deductible from 2022? There is a mix of repairs and capital improvements across both years. Do we need to go live in 2023 for this year's expenses to be deductible? Or do expenses carry over to 2024? 

Lastly, should I do a cost segregation in 2023 to take advantage of the 80% bonus depreciation? Because in 2024 it will be lowered to 60%?

And also I am taking recommendations on a more budget friendly tax professional to discuss more in detail. I've talked to a few from this forum but most state they are fit for more advanced investors with multiple properties and are out of my budget unfortunately. Thanks in advance!

[Michael Plaks]

Quote from @David Orr:

2. This is actually an interesting topic that I've actually went down quite a rabbit hole of researching recently, and it gets complicated.  

Agreed. Let's explore it offline together.