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Hi and welcome to Just Answer!Rental expenses (including depreciation) are deducted as long as the property is available for renting.Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent.Correspondingly - you will deduct all other rental expenses mortgage interest, insurance, utilities etc - even you do not have any rental income - so you will have rental losses which may be used to offset rental income from other units.
When you retire it from service - you stop depreciating property and all expenses related to the renovation should be capitalized. Thus - there is no strict guidelines - but I assumed if the renovation takes longer than a year - and the property is not available for renting during that period - then all expenses related to that property are capitalized (added to the basis) - including mentioned expenses - mortgage interest, insurance, utilities etc.
Since there are no strict guidelines, could I just as well take the annual expenses and not amortize them?
Yes - that is possible. The IRS specifically mentioned in the publication 527 that you continue to depreciate the rental property if it is temporarily idle - that means - you are treating the property as a rental property - and rental expenses are deductible as if the property is rented. However you still need to capitalize renovation expenses.
The main point here is that the property was a rental property and will be a rental property after renovation; and that is temporary not rented.