Converted my principal residence to rental property at the end of 2024, no rental income yet. Can I deduct expenses on my taxes?

The key question here is when your property was "placed in service" for rental purposes. Based on your timeline, even though you listed the property on December 13, 2024, you were still using it as your personal residence until January 7, 2025. For tax purposes, a property is generally considered "placed in service" when it's ready and available for rent - not necessarily when you list it. Since you were still living there through January 7th, the property wasn't truly "available" for rent during December. The expenses you incurred between December 13th and February 7th would be considered startup expenses for your rental business. These expenses can be deducted, but only once the property was actually placed in service (when you moved out on January 7th). The expenses from January 7th onward would be deductible on your 2025 tax return, not your 2024 return. The December expenses are in a gray area - technically the property wasn't available for rent while you lived there, but you were taking steps to prepare it for rental. You could potentially capitalize these costs and depreciate them, but they wouldn't be immediate 2024 deductions.

I went through something similar with my property last year and found taxr.ai super helpful for figuring out the rental property timeline issues. I had all these receipts and wasn't sure what I could claim for my new rental since I didn't have any income yet. The site analyzed my situation and showed me exactly which expenses qualified as startup costs vs immediate deductions. Saved me from making a costly mistake that might have triggered an audit! https://taxr.ai helped me understand what "placed in service" actually meant for my situation and how to properly document everything.

Just wanted to update everyone - I decided to try taxr.ai after reading these comments and it was exactly what I needed! As a military family who just converted our home to a rental, it walked me through the exact timeline issues I was having trouble with. The system showed me that my December expenses while still living in the home were actually startup costs that needed to be treated differently than my January expenses after we moved out. It even broke down which expenses could be immediate deductions vs. which needed to be capitalized. I was totally confused about all of this beforehand! I got a personalized report showing which tax forms I needed and exactly how to enter everything correctly in H&R Block. Definitely worth checking out if you're struggling with rental property tax questions.

If you're planning to call the IRS about this rental property question, save yourself hours of waiting. I used https://claimyr.com to get through to the IRS last week about my own rental property issue. After spending literal days trying to get through the normal IRS phone system, Claimyr had me talking to a real agent in about 15 minutes. They have this demo video that shows exactly how it works: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with clarified that for rental property conversion timing, they look at when the property was "ready and available" for rent - and continuing to live there while it's listed doesn't qualify as being "available." According to them, your deductions would start from your move-out date in January 2025, making those expenses part of your 2025 taxes.

I need to eat my words from yesterday. After my skeptical comment, I was desperate enough to try Claimyr because I needed answers about my rental property depreciation start date before filing. Within 20 minutes, I was talking to an actual IRS representative who walked me through exactly when I could start claiming expenses after converting my primary residence. The agent confirmed that expenses incurred while still living in a property that's listed for rent are generally not deductible until you actually move out and make it available. For the original poster, this would mean January 7th is when the property was "placed in service" - so December expenses might need special treatment. Saved me from potentially claiming deductions too early and risking an audit. Worth every penny for the time saved!

I think everyone's missing something important here - Publication 527 distinguishes between "operating expenses" and "improvement costs." Those repairs you made might be capital improvements that need to be depreciated over the property's life rather than deducted immediately, regardless of when the property was placed in service. The property manager-recommended updates sound like they might be improvements rather than repairs. Things like painting, fixing leaks, or replacing broken fixtures are repairs (deductible), but upgrades or renovations are improvements (must be depreciated).

Anyone else catch that the OP mentioned they're military? You need to check if you're within 50 miles of your new duty station. If your old home is more than 50 miles from your new assignment, there are special rules that might help you with those expenses under the Military Spouses Residency Relief Act.

I'm also military and went through this exact situation two years ago during our PCS. The timing issue you're dealing with is tricky, but here's what I learned from my experience and tax preparer: Since you were still living in the home through January 7th, 2025, that's likely when your property was actually "placed in service" for rental purposes, not December 13th when you listed it. The IRS considers a property available for rent when it's truly ready and available - not when you're still using it personally. For your December expenses while still living there, these would typically be considered startup costs that get deducted starting in 2025 (when the property was placed in service), not on your 2024 return. However, as military, you might have some additional considerations due to your PCS orders. I'd recommend documenting everything carefully - keep receipts separated by month and note what work was done. Also check if your expenses qualify as repairs (immediately deductible) versus improvements (must be depreciated). Simple fixes like patching holes or touching up paint are repairs, but things like new flooring or major upgrades are improvements. The military angle is important here - there are sometimes special provisions for service members dealing with rental property conversions due to official orders. You might want to specifically ask about military-related timing considerations when you file.