Put your property in service first. If you buy a real estate property and start immediately remodeling, you are a real estate developer. That means there are no deductions until it’s put the property in service. Meanwhile, the expenses have to be capitalized and depreciated or amortized later. You won’t be able to depreciate the depreciable property and you can’t take the 100% bonus depreciation.
The strategy here is to put it in service. It could mean that you start off renting the property for a low amount and not for the eventual intended purpose. For example, let’s say you take a property is a low end single family home and you want to remodel it to a luxurious standard. First rent it at the low end, and then gradually improve it. One of my clients bought a blank lot and wanted to find a way to take some write-offs on it. After our consultation, he put up perimeter fencing and rented the lot to a nearby contractor who needed a place to park some of his construction equipment.
Both of these strategies put the property in service. Don’t just inventory your property. Put it in service!