Tax question.can I write off cost of home improvements?
kassidysmommy asked:
I purchased a home and rehabbed it. I have several thousands of dollars in receipts from those improvements. Can this be written off on my taxes? The property was not my primary residence. I realize I will need a professional to do my taxes, but was hoping for some answers prior to that. Thanks!
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I purchased a home and rehabbed it. I have several thousands of dollars in receipts from those improvements. Can this be written off on my taxes? The property was not my primary residence. I realize I will need a professional to do my taxes, but was hoping for some answers prior to that. Thanks!
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May 12th, 2010 at 9:43 pm
Kansieo.com
Sorry, but the improvements cannot be written off. However, when you sell the house, it will increase the basis in the house and reduce your realized gain on the sale.
May 14th, 2010 at 4:25 pm
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If it is a rental property, you can claim the repair expenses against rental income. However, I think what you are talking about is not a repair, it is a home improvement. Home improvement could be considered as capital expenditure. And as such, it should be added to the capital costs.
I am not a US citizen, so I am not sure what your tax law is. But you definately should keep all receipt. When you sell your house, it could help to reduce your capital gain taxes.
May 17th, 2010 at 11:56 pm
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even if a rental can not write off the repairs if improved value of property long term. Just add to cost when you depreciate if you can IE: renting it out.
May 19th, 2010 at 9:30 am
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I need to know the use of the property. Did you rehab it as an investment? Did you rent it? Depending on the answer, the improvements are treated differently.
If it is an investment, then the improvements are added to the basis of the property and your gain when you sell it will be reduced by that amount.
If it is a rental, again the improvements are added to the basis, but you will recover those costs over 27.5 years.
May 22nd, 2010 at 4:54 pm
Kansieo.com
Also keep in mind that the new tax bill passed for 2006 is in effect this year. Meaning things you did to your home to make it more energy effecient is/can be tax deductable.
I am not sure of all the specifics…talk to your tax professional they will advise you on what is in your best intrest.