Hello,

I inherited a house in 2012. I own it free and clear, have never used it as a residence, and have intended from day-one to convert it to a rental.

It was pretty run-down and needed quite a bit of work, so most of 2013 was spent making repairs and improvements. I expect the property to be put in service as a rental at some point in 2014.

My question is: can I deduct expenses, such as utilities, minor repairs, etc. on my 2013 tax return, even though the house was never in service as a rental at any time during the tax year? If I cannot, then can the expenses be carried forward and applied to future tax years after the property is placed in service?