Capitalization of expenses on vacant rental property

Forum|Forum|9 days ago
June 23, 2026
4 replies
115 views

Hello Community,

I have a quesion regarding one of my clients vacant not available for rent rental property.

About four years ago my client got tired of dealing with tenants and took her rental property off of the rental market and it is not available for rent. In the past four years she has spent about $30,000 in property taxes, auto mileage, insurance and repairs. In the past if my mind serves me correctly I have capitalized all of these expenditures and if she starts to rent the property I will begin to depreciate these exepenses. If she decides to sell I will add to basis of property.

I have done some recent research and found that some of the research says outside of taking an itemized deduction for property taxes and if she had any mortage interest the rest of the costs are non recoverable carrying charges. Possibly only if her repairs were big items that were improvements in nature could be added to the basis.

I would like to know what would the people in the community do in this type of situation.

Thanks,

John Skouberdis

ProSeries Professional

Best answer by sjrcpa

“itemized deduction for property taxes and if she had any mortage interest the rest of the costs are non recoverable carrying charges”

This.

sjrcpaAnswer

Level 15

“itemized deduction for property taxes and if she had any mortage interest the rest of the costs are non recoverable carrying charges”

This.

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

J

jskouberdisAuthor

Level 5

SJRCPA,

That is the information that I have been reading also. The property tax deduction does not do her any good since she is married filing jointly and her and her husband take the standard deduction. Is there any way that I could constue the repairs as improvements and the mileage that she claimed she had as a cost of improvements and add to basis and at least recover those costs.

[removed]

BobKamman

Level 15

You can construe repairs as improvements just as easily as you can construe lavender as maroon. Just hope no one questions your opinion.

sjrcpa

Level 15

You can say the reflecting pool is blue when others see green, too.

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

IRonMaN

Level 15

I believe you only feel blue after seen the green knowing how much was spent on that little pool project.

Slava Ukraini!

You can construe repairs as improvements just as easily as you can construe lavender as maroon. Just hope no one questions your opinion.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded