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4 plus years back I purchased an apt building and spent

4 plus years back...

4 plus years back I purchased an apt building and spent several hundred thousand to renovate I didn't claim the full amount i have been claiming a portion $25K each year. I was told that I have to go back and redo my original taxes to claim the full amount in one shot. I think this is an issue to redo the past several years and claim a large amount in one shot

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3/24/2018
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,180
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Hello!

My name is***** will assist you today.

Please give me one moment while I review your question and type my initial response

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When you improve the property the cost is capitalized and depreciated over the life of the building.

Repairs are deducted in the year they are incurred.

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This information is covered in IRS Publication 527, which I have linked to below for your convenience.

https://www.irs.gov/publications/p527

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"The cost of improvements is recovered by taking depreciation."

Improvements.

You must capitalize any expense you pay to improve your rental property. An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use.

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Please let me know your follow up questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

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Customer reply replied 1 month ago
Ok I understand but do I have to go back and redo all the previous returns that seem like a very confusing process

The repairs need to be deducted in the year you incurred the cost.

The improvements would need to be capitalized and depreciated. Claiming a portion each year is not correct. Yes, you should go back and amend the tax returns which don't appear to be done correctly.

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Customer reply replied 1 month ago
ok thank you very much

Please do let me know if you have any additional questions.

Have a great day

Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,180
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified
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