[Note: Early morning April 15, 2019 the Emergency Squad rushed me to the hospital as I was having a
heart attack. Fortunately everything due by 4/15/19 was delivered to clients or extensions filed. After a
triple bypass and a long recovery I am now 80% back. Now trying to catch up on the few weird fact
complicated extensions.]
Question: Cash basis taxpayer with a former home that he has rented for decades. Long term tenant
moved out June 30, 2018 Lots of damages beyond ordinary wear and tear. Client spent rest of 2018
doing major repairs. Did not re-rent until Feb. 2019.
Expenses July - December 2018
1. Repair Foundation deterioration 6,700
2. Replace carpeting 1,300
3. Renovating Kitchen/Bath 14,000
4. Water heater 630
5. Furnace Repair 300
6. R.E. Tax paid Dec. 2018 2,870
I assume all those expenses for Jan-June would be on a 2018 Sch E.
Using a "when placed in service" criteria all costs July-Dec 2018 for repairs and renovations would be
on 2019. So what do I do with real estate taxes, insurance and utility costs July-Dec 2018?
Can I apply the forfeited $600 deposit to any of this.
This is a modest rental with a market value of about $130,000, taxpayer is single and has about
$45,000 in taxable pension income. No big dollars at stake. I appreciate any advice you all can
provide. Thanks for your help. I realize this is likely not a black and white scenario.