Question

Capital expenses/losses

Forum|Forum|1 year ago
April 6, 2025
1 reply
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We tried to buy a rental property but it fell through due to issues that arose during due diligence - the appraisal and the inspection. I see that the expenses are deductible in Publication 535: "The costs you had in your attempt to acquire or begin a specific business. These costs are capital expenses and you can deduct them as a capital loss." Where should I enter those in TurboTax Home & Business? One response from 2019 says to enter it in Personal Income (Other) but the "Learn More" button says that it is not to be used for rental property and the IRS publication clearly categorizes them as business expenses. Thank you!

TurboTax Home & Biz Windows

AmyC

You can deduct expenses that are ordinary and necessary for your business. The business you were trying to start is a rental so it goes on Sch E. You would list appraisal fees and inspection fees as "other expenses".

Be sure you keep all documentation and that you qualify. If you really are in the business of rentals, great.

See Where do I enter income and expenses from a rental property?

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