The IRS Deductions Blog

Posts Tagged ‘are renovations tax deductible’

Question: Tax on rental expenses – renovation or fixing?

I bought my first house in 2007 which me and my wife live in and rent out half of it. Before renting it out, we had it considerably renovated (new floors, paint, tiles, new kitchen cabinets, all new applicanes) even in the rental portion.
I know that my part of renovation will go into the basis (value of my house), but can I calim what I spent on the rental portion as a deductible expense? This was done before the tenants moved in. Also, I did have some repairs after the tenants moved in and requested them.
So, if I hired someone to do the floors and fix a broken sink, paint, repair a leaking pipe, for $10000, how do I divide that myself so as to claim a portion as expense and the other as improvement. IRS will accept my own estimates on this and not come after me in an audit?
I found the answer on www.irss.gov

” If you make repairs as part of an extensive remodeling or restoration of your property, the whole job is an improvement.”

Thanks guys.

Answer: The expenses of renovation for the rental portion go into the basis of the house which you will be depreciating on your tax return. Purchase price of house divided by the percentage that is rented, plus the cost of renovation to the rental portion equals the basis for depreciation. Repairs done while renting the property are rental expenses for maintenance and repair. Improvements are depreciated, repairs and maintenance expensed. The difference is that improvements increase the value of the property, repairs just maintain the property.

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An announcement by the Georgetown Community Foundation (GCF) on Feb. 22 that it has launched a campaign to fund renovations of the Georgetown Little League (GLL) facility on 28th Avenue was met first with rejection and later, suspicion.

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Question: tax deductible?

We need to change our carpet floor to hardwood floor, due to our daughter’s allergy to the dust and other stuff in the carpet. Will the cost of this renovation is tax deductible? Thanks! -Betty

Answer: Improvements are Not Tax Deductible.

Mortage interest and home equity interest is GENERALLY tax deductible.

The primary purpose must be medical Care.

If a capital expenditure for medical care also constitutes a permanent improvement or betterment of the taxpayers property, then the expenditure is deductible only to the extent that it exceeds the increase in the property’s value.

It is all facts taken into account and you need not only the doctor’s note but the value of the property before and after the improvement (cousin Bob’s value does not count)

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YMCA expansion campaign picks up steam

The Beckley-Raleigh County YMCA is accepting donations for a 20,000-square-foot expansion, which officials say will extend numerous benefits to the community.

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