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Level 2
April 1, 2021
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Where do I deduct 2020 SMLLC expenses if the rental property closes in 2021?

  • April 1, 2021
  • 1 reply
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Best answer by sjrcpa

If the new rental property is the only activity of the SMLLC you do nothing with them in 2020. They are startup and/or organization expenses or they will add to the basis of the property.

1 reply

sjrcpa
Level 15
April 1, 2021

Do you mean a SMLLC formed in 2020 incurs expenses in 2020 to buy a rental property, but the property is not acquired until 2021?

The more I know the more I don’t know.
SeA3106Author
Level 2
April 2, 2021

Yes, that's the situation I'm referring to.

sjrcpa
sjrcpaAnswer
Level 15
April 2, 2021

If the new rental property is the only activity of the SMLLC you do nothing with them in 2020. They are startup and/or organization expenses or they will add to the basis of the property.

The more I know the more I don’t know.