Ready and available, not necessarily occupied
A property is placed in service when it is ready and available for use in your rental activity. A vacant property that has been renovated and is actively marketed for rent is placed in service — you don't need a paying tenant in place to start depreciating.
Why the date matters
The placed-in-service date determines which tax year depreciation begins and sets the mid-month convention start for your MACRS schedule. It also determines which rules govern the recovery period. Getting this date right ensures you don't miss deductions in the year you complete renovations.
Conversions require extra care
When you convert a personal-use property to a rental, the placed-in-service date is the date of conversion — not the original purchase date. Your depreciable basis is the lower of your adjusted basis or the fair market value at conversion — a rule that surprises landlords who converted a primary home that had declined in value.
Frequently asked questions
When does depreciation start on a rental?
When the property is ready and available to rent — even if it's currently vacant.
What is the placed-in-service date for a converted primary home?
The date you convert it to rental use, and the depreciable basis is the lower of adjusted cost basis or FMV at the time of conversion.
Sources
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.