NOLO Publishers book Every Landlord’s Tax Deduction Guide, by Stephen Fishman, J D. Easy read, put post-it notes, in to mark pertinent info as you read it.

Expenses that occurred before it was ready and available to rent get put into basis. Expenses incurred once that ad goes up, expensed. Might need to split the property taxes and insurance.

Oh, if it was rented for the month of December, did the ad go up in October or November? Then that might be your ready and available to rent date.

I print out the ads as soon as I post them, put a copy in with the tax return.

I got audited on this my first year in. Was a valuable less about the IRS. I learned more about them in that 4 hr audit then in 35 more years. WHAT I learned is this: these folks work 9 to 5 and like any worker you bust my b ls I bust yours.

Anything prior to it becoming a rental is cost basis. Any education, if you had no rentals at the time of education is not deductible. You must be in the business already to get the deduction.

Would like to mention here for seasoned investors-- I've heard if you PRE PLAN your purchases -- and buy equipment and supplies prior to purchase date of new investment some people have actually charged the fix up costs on NEW purchase to existing properties. I would never do that but heard it has been done once or twice.

A friend was in escrow to buy her first rental home. She wouldn't close until the tenants moved out. I told her that if she purchased the rental with a tenant, then any repairs or remolding made could be written off since it was in service at the time of purchase. Other wise the cost would have been added to the basis.

Okay, here is how this works. For taxes, you want to expense everything you possibly can in the year you incur the expense. If spending becomes part of the property cost basis, you will have to wait until you sell to recover it.

As others have said, you can only expense things if your place if available to be rented.

I deduct real estate taxes in the year paid. I also deduct taxes paid at closing even if they have not been paid to the county yet.

Steve TN I'm not sure what you wrote in first paragraph is correct?

Myob, I'm a non cpa tax junkie. I'm with steve. Imo, you're being good to the IRS with some of your practices. But, it's all about personal preferences.FWIW, went thru a 3 year bumper to bumper IRS audit and was fine.

Steve on a new purchase-- you can't expense it because it's not "in service". Anything you buy to make it a rental-- is added to the cost basis- then depreciated.

There was a subtle change in what the CPA provided to me for working papers and i am not sure how this will impact the schedule Es. In days gone, they question was ask about the number of days the unit has been placed in service. This year they asked, how many days in this year, was the unit rented at fair market value.

If you audited with the second question asked, you would probably be asked to show a written lease. With the first question, they may ask for a demonstration of how it was marketed.

If you have a second home that you use for personal use say 3 months of the year and then you rent it out another 7 months as an off season vacation rental - by asking the questions they were asking and the new ones, would allow them to go after folks who are trying to claim business use of a non business asset. What would happen if the house was rented only twice on FRBO during that other 9 months.

I do like you asking the question about fair market rental value, but that would be rather hard to prove what that value really is. If it falls on the pricing spectrum of rentometer, you should be alright.