{"id":13476,"date":"2025-05-27T18:37:23","date_gmt":"2025-05-28T00:37:23","guid":{"rendered":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/"},"modified":"2026-03-31T01:01:51","modified_gmt":"2026-03-31T01:01:51","slug":"capitalizing-construction-interest-and-carrying-costs","status":"publish","type":"epkb_post_type_3","link":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/","title":{"rendered":"Capitalizing Construction Interest And Carrying Costs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-right counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table Of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Treasury_Regulations\" >Treasury Regulations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Importance_of_Capitalizing_Carrying_Costs\" >Importance of Capitalizing Carrying Costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Mechanics_of_How_This_Works\" >Mechanics of How This Works<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#IRC_Section_266_Election_Verbiage\" >IRC Section 266 Election Verbiage<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Bonus_Depreciation_and_Section_179_Expensing\" >Bonus Depreciation and Section 179 Expensing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Gaming_the_System\" >Gaming the System<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Just_Purchased_the_Rental_Property\" >Just Purchased the Rental Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\" >I Just Got A Rental, What Do I Do? 2026 Edition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Rental_Expert_Pod_the_REP\" >Rental Expert Pod (the REP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\" >Talk to a Real Estate CPA About Your Rental Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#Schedule_Discovery_Meeting_Now\" >Schedule Discovery Meeting Now<\/a><\/li><\/ul><\/nav><\/div>\n<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8221;&#8221; woodmart_inline=&#8221;no&#8221; text_larger=&#8221;no&#8221;]<img decoding=\"async\" class=\"size-full wp-image-31845 alignright\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/354663_2490201073_carrying_costs_300-1.jpg\" alt=\"\" width=\"300\" height=\"191\" \/>By <strong>Jason Watson, CPA<\/strong><br \/>\nPosted Sunday, May 25, 2025<\/p>\n<p>There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. There might be others, but here we go-<\/p>\n<ul>\n<li>You build a rental property from scratch.<\/li>\n<li>You own a rental property and take it offline to start over-priced renovations and improvements.<\/li>\n<li>The rental property is not in service for whatever reason, but is also not undergoing construction, renovations or improvements (bad).<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Treasury_Regulations\"><\/span>Treasury Regulations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Let\u2019s look at <a href=\"https:\/\/www.law.cornell.edu\/cfr\/text\/26\/1.266-1\" target=\"_blank\" rel=\"noopener\">Treasury Regulations Section 1.266-1<\/a> first. The first paragraph reads in part-<\/p>\n<p style=\"padding-left: 40px;\">(a)(1) In general. In accordance with section 266, items enumerated in paragraph<\/p>\n<p style=\"padding-left: 40px;\">(b)(1) of this section may be capitalized at the election of the taxpayer.<\/p>\n<p>Next, 1.266-1(b) reads-<\/p>\n<p style=\"padding-left: 40px;\">(b) Taxes and carrying charges.<br \/>\n(1) The taxpayer may elect, as provided in paragraph (c) of this section, to treat the items enumerated in this subparagraph which are otherwise expressly deductible under the provisions of Subtitle A of the Code as chargeable to capital account either as a component of original cost or other basis, for the purposes of section 1012, or as an adjustment to basis, for the purposes of section 1016(a)(1). The items thus chargeable to capital account are:<\/p>\n<p style=\"padding-left: 40px;\">(i) In the case of unimproved and unproductive real property: Annual taxes, interest on a mortgage, and other carrying charges.<\/p>\n<p style=\"padding-left: 40px;\">(ii) In the case of real property, whether improved or unimproved and whether productive or unproductive:<\/p>\n<p style=\"padding-left: 40px;\">(a) Interest on a loan (but not theoretical interest of a taxpayer using his own funds),<\/p>\n<p style=\"padding-left: 40px;\">(b) Taxes of the owner of such real property measured by compensation paid to his employees,<\/p>\n<p style=\"padding-left: 40px;\">(c) Taxes of such owner imposed on the purchase of materials, or on the storage, use, or other consumption of materials, and<\/p>\n<p style=\"padding-left: 40px;\">(d) Other necessary expenditures, paid or incurred for the development of the real property or for the construction of an improvement or additional improvement to such real property, up to the time the development or construction work has been completed. The development or construction work with respect to which such items are incurred may relate to unimproved and unproductive real estate whether the construction work will make the property productive of income subject to tax (as in the case of a factory) or not (as in the case of a personal residence), or may relate to property already improved or productive (as in the case of a plant addition or improvement, such as the construction of another floor on a factory or the installation of insulation therein).<\/p>\n<p>Yawn. Let\u2019s break this down a bit into chunks to make some sense of it all.<\/p>\n<p>First, the phrase \u201cchargeable to capital account\u201d generally means the expense may be capitalized and added to the cost basis of the rental property. In turn, this capitalized expense may be depreciated over time.<\/p>\n<p>Second, there is a slight distinction between raw land that is unimproved and unproductive, and other real property that might be improved or unimproved, and might be productive or unproductive. This is a subtle distinction but can be read as new construction and renovations.<\/p>\n<p>Third, note that Section 1.266-1(b)(1)(ii), the renovations part if you will, has a catchall \u201cother necessary expenditures.\u201d This would naturally include insurance and utilities, on top of mortgage interest and property taxes.<\/p>\n<p>Fourth, if you read beyond what is detailed here, the term \u201cproject\u201d is used frequently. Treasury Regulations 1.266-1 define \u201cproject\u201d as-<\/p>\n<p style=\"padding-left: 40px;\">For purposes of this section, a project means, in the case of items described in paragraph (b)(1)(ii) of this section, a particular development of, or construction of an improvement to, real property, and in the case of items described in paragraph (b)(1)(iii) of this section, the transportation and installation of machinery or other fixed assets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Importance_of_Capitalizing_Carrying_Costs\"><\/span>Importance of Capitalizing Carrying Costs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Why should you care about this gibberish? Recall that if the rental property is not in service (ready and available for occupancy, and held out for rental use), it reverts to an investment property or a second home, and you are severely limited on tax deductions. Property taxes and mortgage interest might be limited. Insurance, utilities and HOA dues, and related expenses, are all suddenly non-deductible. Bummer.<\/p>\n<p>However, if your rental property is taken offline for renovations, the expenses above are generally deductible as operating expenses if your intent is to continue holding the property to produce income. Sure, they might be again limited because of passive activity loss limitations, but they are either deductible when you have net rental income (profits) or when you sell the property.<\/p>\n<p>So, how can you find yourself in a pickle? If you purchase a rental property and immediately start renovations, you will need the benefit of <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/266\" target=\"_blank\" rel=\"noopener\">IRC Section 266<\/a> to capitalize these expenses for later depreciation and deduction.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Mechanics_of_How_This_Works\"><\/span>Mechanics of How This Works<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The mechanics of capitalizing certain carrying costs during construction or renovations takes a bit of math. Let\u2019s say you are renovating a kitchen immediately after closing and the rental property is unavailable for 64 days. This is about 17.5% of the year, with the inverse being 82.5% as in-service time (yeah, we are assuming a Jan 1 purchase date which is a bit unrealistic, but whatever). Here is a table showing the math-<\/p>\n<table style=\"width: 90%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left; width: 20%;\"><strong>Expense<\/strong><\/td>\n<td style=\"text-align: center; width: 20%;\"><strong>Amount<\/strong><\/td>\n<td style=\"text-align: center; width: 20%;\"><strong>%<\/strong><\/td>\n<td style=\"text-align: center; width: 20%;\"><strong>OpEx<\/strong><\/td>\n<td style=\"text-align: center; width: 20%;\"><strong>CapEx<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Advertising<\/td>\n<td style=\"text-align: center; width: 20%;\">1,500<\/td>\n<td style=\"text-align: center; width: 20%;\">100.0%<\/td>\n<td style=\"text-align: center; width: 20%;\">1,500<\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Management Fees<\/td>\n<td style=\"text-align: center; width: 20%;\">2,800<\/td>\n<td style=\"text-align: center; width: 20%;\">100.0%<\/td>\n<td style=\"text-align: center; width: 20%;\">2,800<\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Mortgage Interest<\/td>\n<td style=\"text-align: center; width: 20%;\">19,300<\/td>\n<td style=\"text-align: center; width: 20%;\">82.5%<\/td>\n<td style=\"text-align: center; width: 20%;\">15,923<\/td>\n<td style=\"text-align: center; width: 20%;\">3,378<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Tax &#8211; Property<\/td>\n<td style=\"text-align: center; width: 20%;\">7,600<\/td>\n<td style=\"text-align: center; width: 20%;\">82.5%<\/td>\n<td style=\"text-align: center; width: 20%;\">6,270<\/td>\n<td style=\"text-align: center; width: 20%;\">1,330<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Tax &#8211; Sales<\/td>\n<td style=\"text-align: center; width: 20%;\">3,400<\/td>\n<td style=\"text-align: center; width: 20%;\">100.0%<\/td>\n<td style=\"text-align: center; width: 20%;\">3,400<\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Utilities<\/td>\n<td style=\"text-align: center; width: 20%;\">4,800<\/td>\n<td style=\"text-align: center; width: 20%;\">82.5%<\/td>\n<td style=\"text-align: center; width: 20%;\">3,960<\/td>\n<td style=\"text-align: center; width: 20%;\">840<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 20%;\">Total Capitalized<\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\"><\/td>\n<td style=\"text-align: center; width: 20%;\">5,548<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Some items to note- \u201cOpEx\u201d is nerdy accounting speak for operating expenses, and \u201cCapEx\u201d refers to capital expenditures (not expenses). Yeah, sure, CapEx usually refers to buying something bigger, better, shiny and new, but it is fun to say OpEx and CapEx when illustrating the effects.<\/p>\n<p>Next, certain expenses will remain 100% operating expenses such as advertising, management fees, sales tax, among others, since these expenses were incurred during the rental property\u2019s in-service period.<\/p>\n<p>Let\u2019s say you spend $60,000 on the kitchen renovation. You would book the asset on your tax return\u2019s fixed asset listing as $65,548 with the $5,548 representing the capitalized carrying costs.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"IRC_Section_266_Election_Verbiage\"><\/span>IRC Section 266 Election Verbiage<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here is a sample election ripped off from our tax software that is attached to a timely filed tax return including extensions-<\/p>\n<p style=\"padding-left: 40px;\">Pursuant to Internal Revenue Code \u00a7 266 and Treasury Regulation \u00a7 1.266-1(b), the taxpayer elects to capitalize carrying charges incurred during the taxable year [e.g., 2024] for the following property:<\/p>\n<p style=\"padding-left: 40px;\">Property Address: [Insert rental property address]<br \/>\nThe taxpayer is capitalizing the following types of carrying charges related to the above property:<\/p>\n<p style=\"padding-left: 40px;\">Utilities (e.g., electricity, gas, water)<br \/>\nInsurance<br \/>\nMortgage interest<br \/>\nProperty taxes<br \/>\nMaintenance and security expenses<\/p>\n<p style=\"padding-left: 40px;\">These costs were incurred prior to the property being placed in service for rental use, and are being capitalized to the basis of the property under this election.<\/p>\n<p>Riveting.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bonus_Depreciation_and_Section_179_Expensing\"><\/span>Bonus Depreciation and Section 179 Expensing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here is an example of a small work-around. Let\u2019s say you take the rental property offline for two weeks to replace the carpet with tile since carpet is generally gross in a rental environment. The cost is $15,000, and you\u2019ve calculated another $1,200 in carrying costs.<\/p>\n<p>Assuming this tile renovation does not qualify for any repair safe harbor (de minimis, small taxpayer, routine maintenance) and it likely does not, you would record a $16,200 asset associated with the rental property. Would this tile renovation be eligible for bonus depreciation or Section 179 expensing? Typically, No, since tile is mortared to the floor structure and considered attached, and therefore would be depreciated over the life of the building.<\/p>\n<p>Ok. Let\u2019s say that carpeting is not that gross in a rental environment since you never use the property personally, and you spend $16,200 replacing it (that would be some fancy carpeting, but let\u2019s roll with it). Good news! According to IRS Publication 948 How To Depreciate Property, this carpeting asset would generally be considered 5-year property and eligible for bonus depreciation and possibly Section 179 expensing should your rental property activity be considered a trade or business (regular and continuous involvement with a profit motive). See our accelerated depreciation and Section 179 deduction section on page 287 for more information.<\/p>\n<p>Do you want more? Of course you do! Some people argue that carpeting in a basement is glued down versus tacked down, and is more aligned with tile in our example above. In other words, it is attached to the floor structure of the foundation and basement concrete.<\/p>\n<p>As you can see, this gets tricky.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Gaming_the_System\"><\/span>Gaming the System<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We can see your wheels turning already- you take the rental property offline for six months to replace a couple of light bulbs. Since your family is helping, you call this a project, and capitalize otherwise non-deductible expenses for later depreciation. Of course, this is facetious and dripping with sarcasm, but at the same time whether you are stuck with non-deductible expenses or you elect to capitalize these same expenses as carrying costs under IRC Section 266 is the million-dollar question.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Just_Purchased_the_Rental_Property\"><\/span>Just Purchased the Rental Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As mentioned elsewhere, the time between when you close on the rental property and get the property ready and available for rent is no-man\u2019s land. Must we now say no-person\u2019s land? No landlord\u2019s land is a mouthful. Regardless, this period of time between purchase and in-service date needs to be as small as you can make it since some rental property expenses are either limited or non-deductible because they don\u2019t qualify as carrying costs (bad), or you need to be claiming renovations where these expenditures are capitalized (not good, but better).<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #a08750;\"><strong>Sidebar:<\/strong> <\/span>As a reminder, the in-service date is not your first rented day. It is the date that the rental property is ready and available for occupancy, and held out for rental use through advertising and related efforts. This makes sense- the asset is deployed for its intended purpose. See our rental property in service defined section on page 85 for more information.<\/p>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=&#8221;25px&#8221;][vc_column_text css=&#8221;&#8221;]<style data-type=\"vc_shortcodes-custom-css\">#wd-69d2f9fcf009f .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d2f9fcf009f .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68e97e561482c .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68e97e561482c .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-title{line-height:60px;font-size:50px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880834fd8436 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880834fd8436 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880835d3a0fb .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880835d3a0fb .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68bcfc71da664 .info-box-title{line-height:46px;font-size:36px;color:#473d3c;}#wd-68bcfc71da664 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}@media (max-width: 1199px) {#wd-69d2f9fcf009f .info-box-title{line-height:34px;font-size:24px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:34px;font-size:24px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:34px;font-size:24px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:50px;font-size:40px;}#wd-6880833b7bd6b .info-box-title{line-height:25px;font-size:15px;}#wd-6880834fd8436 .info-box-title{line-height:25px;font-size:15px;}#wd-6880835d3a0fb .info-box-title{line-height:25px;font-size:15px;}#wd-68bcf7fc8516a .info-box-title{line-height:34px;font-size:24px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:36px;font-size:26px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}@media (max-width: 767px) {#wd-69d2f9fcf009f .info-box-title{line-height:28px;font-size:18px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:28px;font-size:18px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:28px;font-size:18px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:40px;font-size:30px;}#wd-6880833b7bd6b .info-box-title{line-height:24px;font-size:14px;}#wd-6880834fd8436 .info-box-title{line-height:24px;font-size:14px;}#wd-6880835d3a0fb .info-box-title{line-height:24px;font-size:14px;}#wd-68bcf7fc8516a .info-box-title{line-height:28px;font-size:18px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:28px;font-size:18px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}<\/style><div class=\"wpb-content-wrapper\">[vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d2f9fcf009f\" class=\" wd-rs-69d2f9fcf009f wd-info-box wd-wpb text-center box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p style=\"text-align: center;\"><em>Jason Watson, CPA, is a partner and the CEO of <strong>WCG CPAs &amp; Advisors,<\/strong> a boutique yet progressive tax, accounting and <\/em><em>rental property consultation and real estate CPA firm with over 90 team members and 7 partners headquartered in Colorado serving real estate investors worldwide.<\/em><\/p>\n<div style=\"display: flex; justify-content: center;\"><a href=\"https:\/\/www.linkedin.com\/in\/jason-watson-cpa\/\"><img decoding=\"async\" class=\"alignnone wp-image-17327 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/linkedin-150x150-1.png.webp\" alt=\"Jason Watson CPA LinkedIn\" \/><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0<a href=\"mailto:jason@wcginc.com\"><img decoding=\"async\" class=\"alignnone size-thumbnail wp-image-17334 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/mail-150x150-1.png.webp\" alt=\"Jason Watson CPA Email\" \/><\/a><\/div>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d3e2e584de8\" class=\" wd-rs-69d3e2e584de8 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\"><\/span>I Just Got A Rental, What Do I Do? 2026 Edition<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p><img decoding=\"async\" class=\"alignright wp-image-100749 size-full\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Web-and-Social-GFX-2026_300.jpg\" alt=\"\" width=\"300\" height=\"360\" \/>This KB article is an excerpt from our 530+ page book (yeah, thick, there are some picture pages, but no scratch and sniff) which was <span style=\"color: #ff0000;\"><strong>updated April 5, 2026<\/strong><\/span>, and is available in paperback from <a href=\"https:\/\/wcginc.com\/amazon-rental\" target=\"_blank\" rel=\"noopener\">Amazon<\/a>, as an eBook for\u00a0<a href=\"https:\/\/wcginc.com\/kindle-rental\" target=\"_blank\" rel=\"noopener\">Kindle<\/a>\u00a0and as a\u00a0<a href=\"https:\/\/wcginc.com\/pdf-rental\" target=\"_blank\" rel=\"noopener\">PDF<\/a>\u00a0from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or\u00a0<a href=\"\/business-services\/book\/\" target=\"_blank\" rel=\"noopener\">visit our webpage<\/a>\u00a0which provides more information.<\/p>\n<table class=\"purchase-table\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a href=\"\/amazon-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6657 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/amazon-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Amazon version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/kindle-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6658\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/kindle-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Kindle Version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/pdf-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6659 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/PDFresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | PDF version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><strong>$32.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$21.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$18.95<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68e97e561482c\" class=\" wd-rs-68e97e561482c wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Rental_Expert_Pod_the_REP\"><\/span>Rental Expert Pod (the REP)<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>WCG's tax team structure is built around Pods \u2014 small, agile groups of tax professionals (4-6 total) who embrace team camaraderie while achieving client intimacy. Each Pod is led by a seasoned tax manager or partner, and together they make up the core of our tax return preparation.<\/p>\n<p>For the 2026 tax season, we\u2019re thrilled to introduce the <a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Rental Expert Pod<\/a> or REP for short. This is WCG\u2019s dedicated team of real estate CPAs and rental property tax specialists focused on optimizing your tax position, ensuring compliance, and helping you build long-term wealth through smart real estate strategies. [<a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Learn More<\/a>]<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" el_id=\"consultation-secc\" woodmart_css_id=\"6756f7d427735\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzU2ZjdkNDI3NzM1Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c6336e7f\" class=\" wd-rs-68460c6336e7f wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb-fix \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\"><\/span>Talk to a Real Estate CPA About Your Rental Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Please use the form below to tell us a little about yourself, and what you have going on with your investments and wealth-building objectives. <strong>WCG CPAs &amp; Advisors<\/strong> are real estate CPAs, tax strategists and rental property consultants, and we look forward to talking to you!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner el_id=\"consultation-inner\" woodmart_css_id=\"66fd6caf92fc0\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NmZkNmNhZjkyZmMwIiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner][vc_raw_js el_class=\"defaultBot\"]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3Y2dpbmMuam90Zm9ybS5jb20lMkZqc2Zvcm0lMkYyNTE2NjU1MjUzNjk5NzElMjIlM0UlM0MlMkZzY3JpcHQlM0UlMEE=[\/vc_raw_js][\/vc_column_inner][\/vc_row_inner]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460abfbd4d1\" class=\" wd-rs-68460abfbd4d1 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title defaultBot \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>The tax advisors, business consultants and rental property experts at <strong>WCG CPAs &amp; Advisors<\/strong> are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.<\/p>\n<p>We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn\u2019t make it a good idea. In other words, let\u2019s not automatically convert \u201cyou can\u201d into \u201cyou must.\u201d<\/p>\n<p><strong>Let\u2019s chat so you can be smart about it.<\/strong><\/p>\n<p>We typically schedule a 20-minute complimentary quick chat with one of our Partners or our amazing Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax strategy and planning? Rental property support?<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner equal_height=\"yes\" el_class=\"boxes--pack\" woodmart_css_id=\"673b5f334f247\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzNiNWYzMzRmMjQ3Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880833b7bd6b\" class=\" wd-rs-6880833b7bd6b wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Text-WCG-Offices-1.jpg\" class=\"attachment-full size-full\" alt=\"Text WCG Offices\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Text WCG Offices<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Need to get in touch through a quick text?\u00a0 We\u2019ll respond back within a day and get going!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"sms:+17193452100?&amp;body=Hey%20WCG!%20Please%20call%20me%20to%20discuss%20your%20CPA%20services\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880834fd8436\" class=\" wd-rs-6880834fd8436 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-Our-Amazing-Team-1.jpg\" class=\"attachment-full size-full\" alt=\"Chat our amazing team\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Call Our Amazing Team<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p class=\" \">If you need to speak to a tax professional now, give us a call and we'll get you connected.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"tel:719-387-9800\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880835d3a0fb\" class=\" wd-rs-6880835d3a0fb wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes nav-button-chat \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-With-a-Tax-Pro-2.jpg\" class=\"attachment-full size-full\" alt=\"Chat with a tax pro\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Chat With a Tax Pro<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Taxes can be tricky. Chat with a WCG human now and get questions answered.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" woodmart_css_id=\"684abef7ecaa9\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2ODRhYmVmN2VjYWE5Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcf7fc8516a\" class=\" wd-rs-68bcf7fc8516a wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Schedule_Discovery_Meeting_Now\"><\/span>Schedule Discovery Meeting Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner content_placement=\"middle\" el_class=\"client-review-secs box--card\" woodmart_css_id=\"672e712482714\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzJlNzEyNDgyNzE0Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\" woodmart_css_id=\"671780b35b49a\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBiMzViNDlhIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t<div id=\"wd-68874e76cd7bc\" class=\"wd-image wd-wpb wd-rs-68874e76cd7bc text-left \">\n\t\t\t\n\t\t\t<img decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/265518_2057667071_tax_consultation_300-1.webp\" class=\"attachment-full size-full\" alt=\"Request a Meeting with WCG Inc\" \/>\n\t\t\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"2\/3\" woodmart_css_id=\"671780c0415fb\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBjMDQxNWZiIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcfc71da664\" class=\" wd-rs-68bcfc71da664 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none with-btn box-btn-static \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Ready to schedule now and talk all things rentals? Let's do it! Here is a link to a Discovery Meeting with one of our Partners or Senior Tax Professionals to understand your tax footprint and objectives, and how <strong>WCG CPAs &amp; Advisors<\/strong> might help.<\/p>\n<\/div>\n\n\t\t\t\t\t\t<div class=\"info-btn-wrapper\"><div id=\"wd-6a31cbaad7785\" class=\"  wd-button-wrapper text-left\"><a href=\"https:\/\/calendly.com\/wcg-cpas-advisors\/discovery-meeting-instant\" title=\"\" target=\"_blank\" class=\"btn btn-style-default btn-shape-rectangle btn-size-default\">Schedule Meeting<\/a><\/div><\/div>\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/div>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. There might be others, but here we go- You build a rental property from scratch. You own a rental property and take it offline to start over-priced renovations and improvements. The rental property is not in service for whatever reason, but is also not undergoing construction, renovations or improvements (bad).<\/p>\n","protected":false},"author":6,"featured_media":31845,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"epkb_post_type_3_category":[178],"epkb_post_type_3_tag":[],"class_list":["post-13476","epkb_post_type_3","type-epkb_post_type_3","status-publish","has-post-thumbnail","hentry","epkb_post_type_3_category-chap-11-operational-asset-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Carrying Costs - Renovation Mortgage Interest - Capitalizing Costs<\/title>\n<meta name=\"description\" content=\"There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. Deduct? Capitalize?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Capitalizing Construction Interest And Carrying Costs\" \/>\n<meta property=\"og:description\" content=\"There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. Deduct? Capitalize?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/\" \/>\n<meta property=\"og:site_name\" content=\"WCG CPAs &amp; Advisors\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-31T01:01:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/wcginc.com\/wp-content\/uploads\/354663_2490201073_carrying_costs_300-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"191\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"8 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Carrying Costs - Renovation Mortgage Interest - Capitalizing Costs","description":"There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. Deduct? Capitalize?","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/","og_locale":"en_US","og_type":"article","og_title":"Capitalizing Construction Interest And Carrying Costs","og_description":"There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. Deduct? Capitalize?","og_url":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/","og_site_name":"WCG CPAs &amp; Advisors","article_modified_time":"2026-03-31T01:01:51+00:00","og_image":[{"width":300,"height":191,"url":"https:\/\/wcginc.com\/wp-content\/uploads\/354663_2490201073_carrying_costs_300-1.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/","url":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/","name":"Carrying Costs - Renovation Mortgage Interest - Capitalizing Costs","isPartOf":{"@id":"https:\/\/wcginc.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#primaryimage"},"image":{"@id":"https:\/\/wcginc.com\/kb-rental-property\/capitalizing-construction-interest-and-carrying-costs\/#primaryimage"},"thumbnailUrl":"https:\/\/wcginc.com\/wp-content\/uploads\/354663_2490201073_carrying_costs_300-1.jpg","datePublished":"2025-05-28T00:37:23+00:00","dateModified":"2026-03-31T01:01:51+00:00","description":"There are three primary situations when it comes to mortgage interest and other carrying costs during construction including renovations. Deduct? 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