Schedule E losses on property undergoing major capital improvement

The actually instructions from pub 527 are as follows:

Vacant rental property.

If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you can’t deduct any loss of rental income for the period the property is vacant.

Pub 527 also says:

Vacant while listed for sale. 

If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property isn’t held out and available for rent while listed for sale, the expenses aren’t deductible rental expenses.

A lot of accountants use the same rule for improvements as for a sale. I have always held the opinion  for improvements that it is available, even though a person may not want to live there during the remodel, they are welcome to live there during the remodel if they like, and I take all expenses as usual. Just my opinion