My tenant recently broke her lease (mid-November) and is paid through end of November. The apartment is currently vacant. I needed to perform repairs to the rental property as part of her complaint, even though she has already moved out. I have not decided whether to continue renting it out or move in myself after the repairs, thereby converting it to my primary residence.

My question is the treatment of repair expenses that I will incur. I know they can be deducted in the year they occurred as rental expense for a rental property. However, the jobs will be done while the property is vacant. Do I need to perform all of the jobs before end of November for the costs to still qualify as rental expenses? What would happen if some of the jobs occur in December? When would IRS consider it to be a personal residence/second home? The day I move back in or December 1st?

Thanks and would appreciate any guidance.

#1; In general, if you are a cash-basis taxpayer, you have to pay your repair expenses by the last day of the year to deduct them. If you are an accrual-basis taxpayer, you have to clear the all-events test , that is, all events to determine the exp. must have taken place by year-end, and the exp. must be determinable with reasonable accuracy.



#2:You can still deduct the repair exp. Even if the repair is done (while the pty , as rental pty, is vacant. UNLESS you move back in) that is incurred as a accrual basis TP or when it is paid as a cash basis TP as mentioned above.

#3: As mentioned above.As long as the repair is done after you move back in , then the repair can be treated for personal cost not reported on your Sch E of 1040;as you can see,. you can't deduct repair costs, and usually can't add them to the basis of your home. However, repairs that you do as part of an extensive remodeling or restoration of your home are considered improvements. You add them to the basis of your home. And it increase adj basis of your home.

#4:As mentioned above; I guess the issue for the repair deduction is if the pty is r ental or personal home.



#5:I guess so since you no longer rent it out as you move back in.

Since your tenant recently broke her lease (mid-Novemberyour ), no more lease available.I guess you can check your lease agreement or get some professinl advice from a r/e attorney for sure~~