Posted by John K. Haslach, CPA, MST on February 11, 2005 at 04:11:56:
Yes, you are correct. I may have assumed that. Thank you!
Question on repair write-offs - Posted by Dennis (SoCal)
Posted by Dennis (SoCal) on February 10, 2005 at 11:55:21:
I currently own my own home and am planning on moving out-of-state at the end of this year or early next year. When I bought the home it was a fixer-upper, and although I’ve done quite a bit of work it certainly isn’t ready to rent out yet.
My question is: Can I make all the necessary repairs like new exterior paint, new living room flooring, etc and then write it off on my taxes next year because I’m getting it ready for rental, or does the fact that I’m living in it when the repairs are made negate the tax write-off? Should I wait and try to do it all right after I move out? That could be costly as it would then be vacant while the repairs are going on.
Thanks.
Re: Question on repair write-offs - Posted by John K Haslach, CPA, MST
Posted by John K Haslach, CPA, MST on February 10, 2005 at 13:40:49:
If it is your personal residence, you cannot take a deduction for any repairs. If it is an improvement, it will add to the basis of your home which will decrease any taxable gain upon sale. Under present federal tax law, the first $500,000 of gain on the sale of your principal residence is tax free as long as you meet the use tests. Your state may or may not follow federal law. If you make repairs after converting to rental, they will be deductible. If you make improvements, you need to capitalize them and depreciate them over 27.5 years.
Re: Question on repair write-offs - Posted by JohnBoy
Posted by JohnBoy on February 10, 2005 at 22:15:22:
Doesn’t the $500k deduction only apply to married couples filing a joint return? And only $250k if single?