Home Improvement Deductions
Posted on Friday, December 14, 2007 at 5:17 pmCategory: Moving Tips
Just received this excerpt from a real estate agent email. I think a lot of folks may be under the impression that minor home improvements to increase marketability of a home are tax deductible.
NO TAX DEDUCTION FOR HOME-SALE FIX-UP EXPENSES
DEAR BOB: We plan to sell our house in 2007. I seem to remember that home fix-up costs prior to a sale are deductible from the sale price for tax purposes. Does this deduction still exist, and what timing or other conditions apply? –Richard B.
DEAR RICHARD: In 1997, Congress abolished that tax subtraction (not a deduction) for home fix-up expenses incurred shortly before sale.
However, if you make significant home capital improvements, the cost can be added to your home’s adjusted cost basis to reduce your capital gain upon sale. Your tax adviser can provide full details.
