[hrappleyea]

I have a second house that has been renovated in '09 for leasing. I have paid over 10k and haven't received any rent yet. Can the loss this year 09 be claimed on my taxes as a loss? Could under renting be consider a loss on my 09 taxes?

[AtlantaTaxExpert]

You may be able to claim some of those expenses as a rental loss on Schedule E even though you have not rented the house. It depends on the nature and extent of the work being done.

Simple repairs and maintenance, such as painting, replacing broken windows and doors, installing new carpet, repairing holes in the wall, can be expensed on Schedule E.

However, if the work involves extensive renovation, such as remodeling the kitchen or bathrroms, or replacing the roof, then the work as a whole is considered to be a capital improvement of the rental house. The costs of such work then has to be added to the basis of the house (what you paid for it) and depreciated over 27.5 years (the mandated life of residential real estate). This too is deducted using Form 4562 in conjunction with Schedule E.

Strongly recommend that you use a tax professional to prepare your 2009 tax return. There are many pitfalls in preparing a tax return with rental property, and a tax professional will more than earn his fee to keep you free of those pitfalls.

[hrappleyea]

How many years could I go back? Or could I go back to previous years of repairs? This could add up to more expenses. Thank you for your response

[AtlantaTaxExpert]

You can claim refunds for calendar years 2006, 2007 and 2008.

For 2005 and earlier, the thre-year statue of limitation will prevent you from claiming any additional refunds.