Tax Question: Rental prop -> failed renovation -> sold
Bought a rental property in LA County, CA back in April 2018. Rented until Sept. 2018. Hired contractor for renovation in May 2018. Due to unexpected increase in cost to complete renovation the renovation project was abandoned April/May 2019. Sold property in July 2019. Question is are any of the fees paid for contractor/architect/permits allowable for any tax offsets/carryovers/etc for tax filing? Thanks!
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Obviously a question for your CPA (which I am not), but I would think that any expense incurred that is business related to your property can be charged off against income the property generated. It doesn't matter that the renovation was ultimately abandoned... if you spent the money on the property (in furtherance of the property), it can be written off on taxes. Hell, I can go to lunch and talk about real estate and write off 50% of the lunch! So pretty sure you can write off actual expenses! Your CPA will know for sure.
Randy