Claiming Repairs?
I bought a house last year with major fire damage..
Last year I must have spent 20k rebuilding it..
Can I claim the costs of the repairs or do I have to do this when I sell?
---Mike
[ Edited by Jnzy111 on Date 02/25/2011 ]
Last year I must have spent 20k rebuilding it..
Can I claim the costs of the repairs or do I have to do this when I sell?
---Mike
[ Edited by Jnzy111 on Date 02/25/2011 ]
Comments(0)
Your renovation cost is added to your cost basis. It is not a deduction.
Hopefully, you get all that money back when you sell.
How about travel expenses, mileage, etc?
Can I take that deduction for last year?
Thanks NewKid..[ Edited by Jnzy111 on Date 02/25/2011 ]
If you have a real estate business, then yes you probably can;otherwise, no.
You need to get the definitive answer from your CPA after he/she looks at your entire business and financial posture.
If you rented the property in the year of the repairs, it could have been taken as a loss or depreciated based on what was done, also mileage, etc. NewKid gave solid advise in saying will be added to the cost basis, for example, bought for $20k + $20k repairs, then sold for $100k, would have profit of $60k vs $80 without repairs.