Accepted Answer

Hello angie,

The improvements that you made to this property are considered to be capital improvements. Capital improvements that you make to your home strictly add to your basis in the home. They are not allowed as a tax deduction.

If this home is a personal residence or a vacation home or other personal use property, even minor repairs can never be deducted. Repairs you make to personal property are never deductible. If this is a rental property and you claim rental income each year, then you can deduct the cost of minor repairs as an expense. Minor or routine repairs would be such things as replacing a faucet or a light switch or a broken pipe and other minor repairs and maintenance. Those types of expenses can be deducted if this is a rental property. Routine repairs on personal property are never deductible.

Capital expenses which would include this fence that you had installed would only add to your basis in the property, whether it be personal property or rental property. When you sell this home, your basis will be used to figure any capital gain you have from the sale. So as a result of adding this expense to your basis, you will have a lower capital gain at the time the property is sold. And that is the only time you will receive a tax advantage, as your higher basis will then give you less of a taxable gain that needs to be reported.

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Thank you angie

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	10/21/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad