Accounting & tax
Placed-in-service date
The date property is ready and available for its assigned income-producing use, which can differ from its purchase date or first rent payment.
Glossary
Accounting & tax
Primary references on this page:
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IRS Publication 946: How To Depreciate PropertyA placed-in-service date marks when an asset is ready and available for a specific business or income-producing use. For a rental, that date is not automatically the closing date, the day renovation begins, the lease-signing date, or the day the first tenant pays. The property must be in a condition and position to serve the rental activity.
The date matters because depreciation generally starts when depreciable property is placed in service. A building and later improvements can have different dates. Furniture, appliances, a roof project, and a converted unit may therefore enter the depreciation records separately even though they support the same address.
Vacancy after a property has been placed in service does not necessarily take it out of service if it remains held and available for rent. By contrast, a property still undergoing work that prevents the intended rental use may not yet be ready. Advertising alone is evidence, but it does not cure a condition that makes the unit unavailable.
Document the judgment contemporaneously. Keep completion invoices, inspections, utility readiness, listing activation, photographs, access records, and the first lease together. Facts and tax rules can be nuanced, so the owner should have a tax professional confirm the date rather than selecting whichever day produces the preferred deduction.
Example: ready before the first tenant arrives
A unit finishes required work, passes the owner readiness review, has working utilities, and is offered for immediate rent on September 15. The tenant signs later and moves in October 1. The evidence may support September 15 as the placed-in-service date because the unit was ready and available then, but the complete facts and current tax guidance control.
A readiness evidence packet
The operating file should make the claimed date reproducible rather than relying on memory at tax time. If readiness is disputed, the record should show both physical condition and actual availability.
This is general educational information, not legal or tax advice. Rules vary by state and locality and change over time — check your local law and confirm specifics with a qualified professional.