Interested in becoming a commercial or residential landlord?

You’ll likely have to shell out plenty of money before you ever collect a dime in rent.

But the good news is, some expenses that you would otherwise think of as non-deductible are start-up expenses that find their way to your tax return as tax deductions.

What Are Start-Up Expenses?

“Start-up expenses” are certain costs you incur before a new business begins. In the case of a rental property business, these are costs incurred before you offer the property for rent.1

Unlike operating expenses for an existing business, start-up expenses can’t automatically be deducted in a single year because the money you spend to start a new rental (or any other) business is a capital expense—a cost that will benefit you for more than one year.

Normally, you can’t deduct these types of expenses until you sell or otherwise dispose of the business. But a special tax rule allows you to deduct up to $5,000 in start-up expenses the first year you are in business, and then deduct the remainder (if any) ... Log in to view full article.