Tax Reporting On Rental Rehab Not Yet In Service
I purchased a property in August 03' that I will keep as a rental. It required extensive rehab that I completed in January 04'. Since I did not place the property in service in 03', can I write off any of my acqusition, holding, and/or rehab expenses? If so, how? I purchased the property "subject to" with an LLC holding the Beneficial Interest. Any advice would be greatly appreciated! 
You can only "write off" the costs of rental property ownership and operation after the property is placed in service.
Some of your acquisition costs and your rehab costs are adjustments to your cost basis and are not expensed.
Your prorated property taxes and mortgage interest for 2003 can be deducted on Schedule A as an investment property expense, but only if you itemize.[ Edited by DaveT on Date 03/18/2004 ]