Good day everyone. In short, during the last few months of 2017, I was able to get several properties under contract. I Close later in January. Since I didn't have any income yet generated from the properties, I paid for some set-up expenses (minor supplies) and home inspections from my personal account--all paid in 2017.
When I generate income from the properties, I plan to pay myself back from the rental banking accounts in order to keep it "clean/separate" for tax purposes. My main question--Since I'm paying this expense from business accounts in 2018, can I claim/file in 2018 taxes as that's when the properties technically "paid" the expense or do I claim them in 2017--despite not having any actual rental properties?
Any other issues you see or suggest?
Thanks in advance...
home inspections is usually added to basis and depreciated over its useful life.
minor supplies - if paid to get the property ready to become a rental - it should also be added to basis.
Since these items are added to basis - you won't see the benefit of their depreciation until 2018.