TaxGuyBill
Level 15
03-09-2026
05:49 PM
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It is currently not a rental, so it isn't a rental expense.
My first inclination is that I would capitalize the expenses by making a §1.266-1 election. That would result in deduction now, but adds to the Basis of the property for when it is eventually sold.
https://www.law.cornell.edu/cfr/text/26/1.266-1