Personal Residence Rehab

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When you rehab your personal or primary residence can those costs be written off? Or at least a portion thereof. :-?

Comments(3)

  • NewKidinTown230th October, 2004

    No. A rehab to your primary residence is a non-deductible capital improvement. The cost of your rehab is added to your cost basis.

    You also get the same answer if you are rehabbing your residential rental property instead. The difference here is that the cost of the rehab (while increasing your cost basis) is recovered through depreciation over 27.5 years.

  • getgoing17th November, 2004

    Newkid,

    They would be considered when selling the property right?

  • myfrogger17th November, 2004

    No. The government gives taxpayers a great tax break when they sell their personal residence that that this is really a greater benefit than the tax write off of repairs.

    This is a section 121 exclusion which allows for $250,000 if single ($500,000 if married) to be taken tax free when you sell a property. The only catch is that you must live in the property for 2 out of the last 5 years.

    With rental properties you can write off supplies and small repairs. For major maintenance, this cost is added to the basis on which depreciation is calculated. This gets confusion so i'll stop now since this wasn't in your question.

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