I own home which I tried to sell but ended up renting. I put a lot of $ trying to get property ready for tenants. During the period in which the house was vacant awaiting a renter, can I do anything about lost rent, utility bills?

The expenses incurred for monthly utilities during the period your rental property was vacant will be a normal rental property expense.

As to the expenditures you made in getting the property ready for a tenant. These will be classified in one of two catagories; Repairs; broken window glass, carpet cleaning, touchup painting etc. Property Improvements; those of a long term nature; roof replacement, new appliances, bathroom remodeling, etc.

The cost of the repairs will be a current property expense. The property improvements are actually new property assets or an increased property basis to the physical home. Both of these are depreciable assets.

The IRS has a good Internet site for most tax questions "www.IRS.gov". I recommend publication 946 How to Depreciate Property. And page from there site "IRS Offers Tips on Rental Real Estate Income, Deductions and Recordkeeping" use this Internet link "http://www.irs.gov/businesses/small/article/0,,id=210615,00.html"

Good information, Roy. Anita, the tax law looks primarily at intent with respect to the classification of property. While yours was vacant, as long as you were making bona fide, ongoing efforts to obtain a tenant, the property should be classified as 'rental' during the period of vacancy.

In which case, as Roy pointed out, expenses such as utility bills would be deductible as rental expenses.

However, you also asked about "lost rent". There is no tax issue regarding income which is not received. "Unreceived income" is not a deductible item... it simply plays no role on your tax return.