I have a similiar situation, where property has been vacant for entire year and client doesn't have the monies to get it fixed up yet. It's a condo that needs a lot of work. They have been continuing to pay the condo fees and taxes, but that's it. Pub 527 reads that it's not deductible since it's not up for rent and can't be at the moment. I went into asset entry screen and made business % 10% and that suspended the depreciation. Not sure if that's the best way to handle though.

Ray Burts, EA

R B Tax