Addressing improvements when converting residence to rental

[John L.]

I'm looking to convert my primary residence to rental before the end of the year. There are some maintenance and improvements necessary to make suitable for rent.  For example, I need to fix some gutters and downspouts.  I also need to add some concrete for a driveway.  How are such expenses handled?  

Does the property officially become a rental the day it is rented or the day I can claim a new residence?

Is there a preferred order of operations for tax purposes?

[Patrick I.]

John;

The short answer to your question about the date: you are in the rental business officially the day you advertise it as available to be rented. This is commonly called the "service date"

How are expenses handled: all depends on when the expenses were incurred in reference to the service date (before or after), and the qualification of the work done on the property (repairs vs. improvements). Mostly anything you do before the service date will be added to the cost basis of the property and depreciated over 27.5. If a repair was done after the service date, it will be eligible for deduction for that year taxes. If it is an improvement, you will have to depreciate over 27.5.

Just so you know, I am not a CPA and all I just said came from my reading of

"Every Landlord's Tax Deduction Guide" 14th edition from Nolo. I strongly suggest that you get a copy. You may want to talk to a real estate CPA instead if you need a quick answer.

Good Luck