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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15051
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a question regarding expenses property that I let

Customer Question

I have a question regarding expenses for a property that I let out. At the moment it is let to my daughter for a reduced rent, and I'm aware that I can only claim expenses up to the amount of the rent received, i.e. I cannot make a loss, or any loss made
cannot be carried over to another year. However in a few months she will be moving out and the property will be let at a commerical rent to an unconnected person. If I have any repairs done to the property while my daughter is still in situ can I claim these
as expenses for the next tenant, who will be there in the same tax year.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


If you make repairs to the property while it is not offered for rent at a fair market value then the repairs remain under the time for "not for profit".

These repairs would be used for the time you made them. Improvements would add to the basis (cost) of the property though.

You could look at the "getting the property ready for rent" rules and add to the basis for the costs.

Customer: replied 1 year ago.
>> You could look at the "getting the property ready for rent" rulesThis would be my intention. i just wanted as small amount of time as possible between my daughter moving out and someone else moving in, so wanted to get the repairs done in good time. If the property was advertised as available for letting, would this mean i could include the costs
Expert:  Robin D. replied 1 year ago.

Yes you could but where you include them is to add them to the basis. This will increase your depreciable amount.

You begin to depreciate your rental property when you place it in service for the production of income. You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first.

Customer: replied 1 year ago.
Ok so you are talking about using them to deprecate the value of the property rather than claiming them as expenses against the value of the rent? They aren't capital costs though, they are repairs like repainting or fixing broken things.
Expert:  Robin D. replied 1 year ago.

They are capital in nature when you are preparing for rental profit use.

Unlike operating expenses, start-up expenses cannot automatically be deducted in a single year. These are repairs but they are paid to begin to rent for profit, not used as an expense in one year.

Customer: replied 1 year ago.
In addition the property is a flat and the council that owns the leasehold are doing substantial repairs to the whole building(at a cost to me of approx £4000), new roof, fixing windows painting, communal area, etc. This is something that happens rarely (this is the first time in the 5 years I have owned it). If the invoice will be sent during the next few months. If this happens while this is let to my daughter does it mean I can't claim these either?
Expert:  Robin D. replied 1 year ago.

You used the term "let" but the system showed you to be in the US. All of my answers were US tax applicable not UK.

Until you add the council information I was not aware you were asking about a UK property.

I apologize but I have to request that customer service move your question to the UK category.

Even though I am an International Expert, I cannot answer a UK question in the US site.

Please wait for a reply under UK site.

It may be me or another expert but please do not reply till you hear back.

Customer: replied 1 year ago.
Ok thank you
Expert:  Robin D. replied 1 year ago.

You are welcome. Please do not reply here as it delays the move.

Customer: replied 1 year ago.
This hasn't moved, as far as i can tell so I'll start a new question for it