First time with this scenario. Client purchased a house that needed a lot of work with intent to renovate and then rent it out. Did some demolition work and some renovations, but then moved so he sold this property. While he owned it 1) he never lived in it and 2) he never rented it out, it was never ready. As you might expect, he sold it at a loss.

Since it was never placed in service, I am assuming I report on form 4797 and show depreciation as 0, because nothing was allowable when the property was never placed in service.

Agreed? Other thoughts on how to report properly? Thanks in advance!