Can I purchase appliances for my rental property this year but claim tax deduction next year?

The good news is that you can absolutely purchase those appliances now and still deduct them when you place the property in service as a rental in 2025. What matters for tax purposes is when the property actually becomes a rental (or "placed in service" in tax terminology) - not when you purchased the items. When you eventually file your 2025 taxes, you'll report these appliances as part of your rental property expenses. The appliances will need to be depreciated over their useful life (typically 5 years for appliances) rather than deducted all at once in the first year. You'll start that depreciation in 2025 when the property becomes a rental, even though you purchased them in 2024. Just make sure you keep all receipts and documentation showing when you purchased the items and for how much!

I just went through this exact situation last year! I found https://taxr.ai super helpful for figuring out what I could deduct and when. I bought a condo in November 2023 but didn't get it rented until February 2024, and I was confused about all the startup expenses. Their system analyzed my rental documents and explained exactly how to handle purchases made before the rental was active. They helped me understand that appliances could be depreciated starting when the property became a rental, but things like advertising costs and credit checks could be deducted immediately in the first year. Saved me from making some pretty big mistakes on my Schedule E!

I was skeptical about taxr.ai at first (as you could probably tell from my question above), but decided to try it when I was completely lost on how to handle my basement apartment conversion. I had purchased a bunch of stuff in December and didn't rent the unit until March. The service actually was super helpful! They clarified exactly which expenses I could deduct immediately vs depreciate, and explained that my appliance purchases would begin depreciating when I placed the property in service, even though I bought them months earlier. They even flagged some deductions I was missing completely, like mileage for trips to check on the renovation. Wish I'd known about this when I did my taxes last year!

If you're planning to call the IRS with questions about rental property deductions, good luck getting through! I spent HOURS on hold trying to get clarification on this exact issue. Finally used https://claimyr.com and got a callback from the IRS in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that appliance purchases made before renting are totally fine to deduct (through depreciation) starting when the property becomes a rental. They explained that the "placed in service" date is what matters, not the purchase date. Apparently this is a common question and the IRS has clear guidelines on it.

Ok I need to apologize to Profile 12 - I thought Claimyr sounded like a scam but I was desperate to talk to someone at the IRS about my rental property questions so I tried it. It actually worked exactly as described! Got a call back from a real IRS agent in about 15 minutes. I asked specifically about buying appliances in advance for a rental property, and they confirmed everything already mentioned here - you can buy them whenever, but depreciation starts when the property is "placed in service" as a rental. The agent even emailed me some helpful publications about rental property deductions. I'm honestly amazed this service exists.

Careful about one thing - if you're planning to live in the house at all before renting it out, the IRS might view the appliances as personal use first, then converted to rental use. In that case, your depreciable basis would be the LOWER of cost or fair market value at the time of conversion. Learned this the hard way when I converted my primary residence to a rental!

Is nobody going to mention bonus depreciation??? Depending on when you actually place the property in service, you might be able to take advantage of bonus depreciation on those appliances (its currently at 80% for 2023, 60% for 2024, and 40% for 2025). Check with your tax pro cause the rules are always changing.

Just to add another perspective - make sure you keep detailed records of everything! I bought appliances for my rental in November but didn't start renting until the following April. The IRS audited me two years later and wanted documentation proving when I purchased each item versus when the property was placed in service. I had to provide receipts, bank statements, and even photos showing the appliances were installed before my first tenant moved in. They were particularly interested in the timing because I was claiming depreciation starting from my rental start date rather than purchase date. Everything worked out fine since I had good records, but it was a stressful few months. Also worth noting - if you're buying multiple appliances, consider whether any qualify as "personal property" that can be depreciated separately from the building itself. Sometimes this can give you better depreciation schedules than treating everything as part of the real estate.