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How much repair costs for my rental can i deduct, the woman…

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How much repair costs...

How much repair costs for my rental can i deduct

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The woman living in my rental passed away last August and i had to completely remodel the home. i am doing the work myself and still am. last year i spent 28000 on materials but my tax person told me it can not be deducted until i sell it.

Submitted: 3 months ago.Category: Tax
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Answered in 2 minutes by:
3/25/2018
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,669
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 months ago

YOur tax person is right, at least on the items that re not repairs, but that can be expected to last more than a year ... (called improvements or restorations by the code)

...

Improvements, under the fairly new regs FINALLY issued by IRS, break down into three categries:

...

A unit of tangible property is improved if the amounts paid are:

  • For a betterment to the unit of property; or
  • To restore the unit of property; or
  • To adapt the unit of property to a new or different use.

...

REGULAR repair and maintenance, (replacing door knobs and locks, window panes, etc) are always deductible, but improvements (replacing windows and doors, roofs, decks, etc are considered improvements and must be added to the basis of the house.

...

Now, where the tax person isn't COMPLETELY correct is in the area of having to wait until sold ... it IS true that improvements add to basis, therefore reduced gain at sale (capital gain = sales price - basis) they DO increase your basis for purposes of depreciation, thereby increasing hour yearly depreciation deductions.

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Customer reply replied 3 months ago
in my case the remodel han to be done as the renter was a hoarder and died in the home, She had trashed the bathroom, kitchen and all the floors
Customer reply replied 3 months ago
no thanks
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 months ago

Understand ... thought it might be somehting like that. But, so sorry, remodels are ALWAYS improvements.

...

If you simply replaced carpet in one room, or a countertop in a kitchen you could get away with calling it a repair.

...

But it's the extensiveness of this that MAKES it an improvement, and so much be capitalized and depreciated.

...

So sorry to be the messenger.

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