Writing Off Property Improvements
We purchased a condo a few months ago and are selling before the 1 year mark - knowing the tax liability -
But this property was "rented" to a family member while making renovations and upgrades.
Can we use the $ put into the condo as and investment expense or write off in some way to offset some of the taxes?
FYI - we put about $$3,000 all together for appliances and tile, and are hoping to make about $20k on the sale.
Thanks
You can only write off repairs, not improvments.
For rental income, you can write off repairs and renting expenses (ie. "for rent" advertising, cell phone calls to tenants, etc.), but not improvements.
For capital gains on your condo sale, you can write off improvements (kitchen upgrades, new central air, painting supplies, landscaping costs, etc.) and selling expenses (realtor commission, legal fees, advertising expenses, etc.), but not repairs.
Check out this article, "Home Improvements that Can Lower Your Capital Gains," for further clarification on cap gains:
http://www.bankrate.com/brm/news/mortgages/20040220a1.asp
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