Do all expenses need to be capiltaized before "placed in service"
I have a rental I purchased in September 2017. It needed substantial rehab and it will be ready for rent later this month. My understanding is that all expenses and improvements must be added to the basis. I understand the big items and improvements would need to be but things like the water and sewer bill and electric bill? Would I just need to add up all expenses no matter what they are for and add them to the basis? I also understand the taxes can be written off on Schedule A, but if I won't itemize for 2017 tax year can I also add those to the cost basis as well so that I can get the deduction later on through depreciation? Any insight would be much appreciated! Thanks!
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I believe every dime you spend during renovation, including holding costs, is added to cost basis until the date the property is placed “ in service.” Except maybe mileage. But you need to refer to either an IRS pub or a tax book like jd Lassiter or a nolo book...the ones that have been around forever. I photocopied the advice I used my first property and put it in my tax file. You will likely get good advice here but it appears a lot of people hire accountants so may not really know...eg., my husband is a consultant but has never done the taxes so might not give the best advice on schedule c.