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We built a new 2-car deatched garage over a one-year period.....October

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2009-October 2010. Final payment...
We built a new 2-car deatched garage over a one-year period.....October 2009-October 2010. Final payment was made to the contractor in March 2010. IS this tax deductable, and in what year?

Thank you!
Submitted: 6 years ago.Category: Tax
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Answered in 27 minutes by:
3/2/2011
Tax Professional: JKCPA, CPA replied 6 years ago
JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5,884
Experience: CPA with tax experience.
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Hello,

Thanks for your question.

If this is your personal home and not investment or business property, it would not be deductible. However, this is considered an improvement which adds to your adjusted basis of the property. If you later sell the property, the amount you paid for the garage has the effect of reducing any gain you may have on the sale of the property.

Let me know if this is rental or business property and I will give you the appropriate procedure of that type of property.

Best regards,




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Customer reply replied 6 years ago

Hi JK...

 

It is a personal home. I just had my taxes done today by a profesional and won't get my forms until tomorrow. I was just wondering how he treated this expense? So there was no direct effect on my taxes this year?

Tax Professional: JKCPA, CPA replied 6 years ago
Unfortunately, there would not be any direct deductions for your garage addition expenses for 2009 or 2010 on your tax return.

However, you might qualify for a Residential Energy tax credit if you added qualifying energy efficient items such as insulation, solar panels, solar water heater, etc. For more info, see http://www.irs.gov/newsroom/article/0,,id=214979,00.html
JKCPA
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