To place a property into service, you must meet two requirements:
Renovation and Repair Notes
Rental property investors will often purchase a property vacant and in need of renovations before it’s ready to rent. Any renovation costs incurred before you place the property in service must be capitalized and depreciated (generally over 27.5 years), regardless of whether or not they are actual capital improvements or simply repair and maintenance expenses.
As a best practice, you will want to get in the habit of itemizing your invoices so that you, or your accountant, can more easily categorize these items as repair and maintenance expenses or capital improvements. Itemized invoices are also helpful in determining whether expenses might qualify under one of the safe harbors mentioned in the next section or for 100% bonus depreciation.
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