Tax Treatment of Rental Property in Transition

I have a rental property which I rented for 15 years, ending in mid 2004. I then made the decision to refurbish the property and put it on the market.

This work was finished in June 2005 and I put it up for sale. In September I had an offer, but it fell through. The property is still vacant and on the market.

My question is, can I still use a Schedule E to deduct my Rental Expenses, including depreciation on improvements, even though I had no rental income during 2005 and made no attempt to rent the property.

Thanks in Advance!!


or, you can consider your expenses as “selling expenses” and use that to reduce your gain when you sell.

any depreciation you take will be a wash when you sell.

either way, you can deduct them. after all, they ARE valid business expenses. it’s just a question of now or later.

Mark Wagner, CPA