 We got pre-rental expenses. You can deduct your ordinary and necessary expenses for managing, conserving, and maintaining rental property from the time you make it available for rent. So now we have a question of, well, what if I'm just holding on to the property, and it's not actually being rented at this point in time, but obviously I have to maintain it because I have an intent to rent it. Now, this gets a little bit messy because oftentimes with rental property, people sometimes hold on to the property primarily. There might have a primarily purpose of the property going up in value and getting value increase and possibly a capital gain when they sell the property as opposed to trying the principal purpose being rental income. So then you have to get into the question of, well, were you actually intending to rent out the property or you're just trying to write off expenses of like investment property or something like that, right? But you would think that if your intention is to rent it, then obviously the payments that you're incurring to maintain the property that's going to be rental property even though someone is not in it at the particular moment would be deductible if no one gets in it and in some time you might have losses on that property and losses are what the IRS is going to be skeptical of with this passive rental property stuff. All right, rental of equipment. So you can deduct rent, you pay for equipment that you use for rental purposes. However, in some cases, lease contracts are actually purchase contracts if so you can't deduct these payments. So if you're renting equipment, you can deduct the payments of the equipment that you're renting, but sometimes for different reasons they structure something to look like a lease, but it's actually a purchase in reality because you're going to in essence pay the full purchase price by the end of the where you're going to have a you're going to purchase it by the end or something like that in which case inform it's a lease, but in actuality it's a purchase. So you can recover the cost of purchase equipment through depreciation. So if it's a purchase, you've got to depreciate it. If it's a lease, you expense the lease payments when they come up. So rental of property, you can deduct the rent you pay for property that you use for rental purposes. If you buy a lease held a leasehold for rental purposes, you can deduct an equal part of the cost each each year over the term of the lease. So travel expenses, you can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of this trip is to collect rental income or to manage, conserve or maintain your rental property. So similar kind of concept that we had with the Schedule C type of business. Normal traveling is within the local community. If it's overnight, then it's going to be in the category of travel as opposed to just auto possibly. So you must properly allocate your expenses between rental and non-rental activities. You can't deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. The cost of improvements is recovered by taking depreciation. So we have that same concept again. If you're trying to improve the property, then the cost, from our perspective, we would like to expense it. But the IRS is saying, well, no, that's part of the cost of your improvements, which you would have to put on the books as an asset and not get the benefit of the expense until you depreciate. So for information on travel expenses, you can see chapter one of publication 463 on the IRS website. Uncollected rent. So if you are a cash based taxpayer, don't deduct uncollected rent because you haven't included it in your income. It's not deductible. So if you use an accrual method, report income when you earn it. So if you are unable to collect the rent, you may be able to deduct it as business bad debt. In other words, if you have your system on a cash based system and someone just doesn't pay you the rent, well, you're not going to be able to deduct bad debt expense if you're on a cash based system because you never recorded the income. You just never would have recorded the income. But if you are on the cruel system, you would have recorded the income in the month that they used it. You would have invoiced them. You would have been tracking the accounts receivable. And if they you determined they're not going to pay you, then you would expect you would get a bad debt expense, a deduction, because you had false, you had recorded it in income in the past and you're never going to get the money. So then you would get a deduction. So see chapter 10 of publication 535 for more information about business bad debts, vacant rental property. If you hold property for rental purposes, you may be able to deduct your ordinary necessary expenses, including depreciation for managing, conserving and maintaining the property while the property is vacant. However, you can't deduct any loss of rental income for the period the property is vacant. So there is our situation with the properties not being used. You would think that if your intent is to use it for rental property, you would still get the deductions, but the iris is skeptical of the losses because if you get losses, then you might be able to deduct them against other income. And that's where the iris is skeptical of this whole situation. So they get while listed for sale. If you sell property, you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving or maintaining the property until it is sold. If the property isn't held out and available for rent while listed for sale, the expenses aren't deductible rental expenses. Points. So the term points is often used to describe some of the charges paid or treated as paid by a borrower to take out a loan or a mortgage. So now when we have rental property for purchasing the rental property, we take a loan out to finance the purchase of the rental property. We're going to have to pay interest on the loans. And then sometimes you have this weird things where they structure points and points could be different things. They could be payments for part of the borrowing process or they could be like prepayments of interest or something like that, in which case the question is how are we going to treat those? Do we get to deduct them in the current period? Do we get to call them interest? Do we have to put them on the books and amortize them over the cost of the property, which is a very long time frame, or possibly over the life of the loan as points, which might be a little bit less than the life of the property. So these charges are also called loan organization fees, maximum loan charges, or premium charges. Any of these charges, points that are solely for the use of money, are interest. Because points are prepaid interest, you generally can't deduct the full amount and the year paid, but must deduct the interest over the term of the loan. So the general idea is that, well, you're prepaying the interest, so the governments can say, well, they are interest, but you prepaid them. So you're going to have to put them on the books as an asset, not depreciate them necessarily, not depreciate them as a capital asset part of the property. They're not included as part of the cost of the building, in other words, and depreciated over the life of the building, but rather over the life of the loan.