Until that time you can only deduct property taxes correlated to the building. You cannot deduct mortgage appeal, travel, etc. All of the mortgage appeal, travel, and other costs you incur are “capitalized” and added to your cost basis of the property. You care then allowed to depreciate this cost basis over 27.5 years beginning in the year you start to rent the apartment. Your travel costs using a mileage log and the standard mileage allowance can be added to the cost basis of the apartment.

So you do get a deduction, but it is spread out over many years after the apartment is being rented.

Richard K
Master Tax Advisor
Enrolled Agent

This advice is based upon my understanding of the tax law at the time it was written as it applies to the facts provided by you. See my profile for more information.

Since this is an investment, your appeal deduction is limited to your income and you have no income from it yet. The appeal, as well as the travel costs, would be added to your basis, not deducted as itemized deductions or business expenses. Alternatively they may possibly be treated as start-up costs and amortized over time once it starts generating income.

Locate a CPA or EA who specializes in this type of investment.