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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Is a new septic system tax deductible

Resolved Question:

Is a new septic system tax deductible?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello Scheina,


Is this a new system you had installed for your personal residence?



Customer: replied 7 years ago.

Yes, the entire system, tanks, field needed to be replaced.

Expert:  Merlo replied 7 years ago.

Hello again Scheina,


Improvements you make to your personal residence are never allowed as a tax deduction. They simply add to your basis in the home.


Eventually when you sell the home you will determine the amount of any gain you have from the sale by taking your selling price less your adjusted basis, which will include the cost of any improvements made. By increasing your basis for the improvements made, it will eventually reduce any gain you have when the home is sold, and it is only then that you realize a tax benefit, as your taxable gain on the sale will be lowered by the cost of improvements you made.


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Thank you Scheina



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