A rental property is rented thru June 30th, and then vacant 2.5 months and sold on Sept 15th for a gain. During July -Sept, the property was not marketed for rent, but it was put up for sale. I'm assuming the ordinary & necessary expenses for managing, . .maintaining the property until it is sold are deductible (i.e. HOA fees, interest/taxes, utilities, etc), but are these deductible as a rental expense on Sched E, or as a selling expense on 4797? Public 527 states that
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. (The last line has always confused me -it implies it only has to be available for rent).
But later, it defines being not permanently withdrawn from service until it is sold. .
"You retire property from service when you
permanently withdraw it from use in a trade or business or from use in the
production of income because of any of the following events.
- You sell or exchange the property
- You convert the property to personal use
- You abandon the property
- The property is destroyed."
So that implies I can still deduct the ordinary expenses until it's sold, but where?
Thanks for your help!
