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kwgates
New Member

Captial Expenditures and Capital Gains on Rental Property

If I put in new carpet and replace the roof of my rental property in 2018 and the property is sold in 2019, can I offset the carpet and roof expense against the capital gains tax in 2019?

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1 Reply
Carl
Level 15

Captial Expenditures and Capital Gains on Rental Property

No. Both the roof and the new carpet are capital assets that have to be listed as such in the Assets/Depreciation section. Now if "after" installing the carpet and new roof you did "NOT" rent out the property, you will still list the roof and carpet in the assets/depreciation section, and show them as 0% (zero percent) business use.  The cost of these items will increase your cost basis on the property, thus reducing any taxable gain you may realize, or increasing any loss you may realize on the sale.

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