Do I benefit from tax perspective?

Question

I recently bought a townhouse as a rental property and closed it just before the New Year. Since the start of the new year I have been putting in some expenses on it - Replaced Carpet, House Cleaning, bought windows laptop to utilize MS Office etc and keep track of accounting etc. Do I benefit from tax perspective on any of these expenses I have to put behind the investment property? If yes, how? Could anyone explain?

Steven Hamilton II · Answer

Sam Schlacter,

I highly recommend getting in touch with an accountant experienced in real estate. I can recommend someone if you need.

When did you purchase the townhouse?  Was it just before the beginning of 2012? If so you will be able to depreciate the property from the date you had it ready for rent(also known as "placed in service"."Placed in servce" means it was both in a livable condition AND placed on the rental market.  You will be able to depreciate any items put in service from that point. The carpet will be depreciated over 5 years, the house cleaning will be added to your purchase price and costs to repair or replace items before it was ready for rent.  The laptop too will be depreciated. Any repairs done after that date will be deducted; hwoever, if you replace something it must be depreciated. There are other items that must be depreciated.

If it was just before 01/01/2013, you will not see any benefit until you file your 2013 tax return.

-Steven