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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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Im a residential contractor and considering a large renovation

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I'm a residential contractor and considering a large renovation to my own home (primary residence). My wife and I will get a loan to pay for the renovations. Is it legal to run all the expenses through the company to pay for the renovation to take advantage of the COGS?If the answer is yes we would have a loan transferred to our personal account and the business would invoice my wife & I during the project. Ideally I'd like to drop my hourly rate to the lowest possible in order to survive during the renovation.
Hello and thank you for using Just Answer. Will you business deduct any of the expenses renovating your primary home? Will the loan come from your business? Are you a sole proprietor or a corporation?
Customer: replied 8 years ago.
My idea was to purchase the materials, plumbers, electricians, architects, engineers, etc through the business. The company would invoice my wife & I at cost for these items. The company would deduct the expenses as COGS and Labor Costs whatever the case may be. The loan will come from the homeowner (wife and I) and not the company. Company is an LLC (single member).

Your company must invoice you for the labor costs to renovate your home. You cannot deduct from your business income any expenses you incurs to renovate your home.

Customer: replied 8 years ago.
Is this b/c it's my primary residence?
You can have your residential contractor business renovate your primary residence but you cannot deduct any expenses from your business incurs in the renovation of your primary residence. If your worker are working on your primary residence and other residences during the day you must pro rate the hours worked on your residence from your total labor costs during that day.
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