Where do I deduct any capital investments? We did massive upgrades to our home last year and even this year. I have read the rules and these were not repairs. Thank you

Forum|Forum|3 years ago
February 13, 2023
3 replies
42 views

Capital Investments deduction

TurboTax Free Edition Online

Best answer by GeorgeM777

That depends on the nature of the capital improvements you made to your home. Do any of these improvements involve solar energy? The Inflation Reduction Act expanded the Federal Tax Credit for Solar Photovoltaics, also known as the Investment Tax Credit (ITC). This credit can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system.

Do you rent any part of your home in 2022? If you converted part, or all, of your home into a rental property, then you may have to consider the issue of depreciation in connection with your rental.

With the exception of the possible solar energy credits, assuming all the improvements were done to your personal residence, then yes, these improvements get added to the basis in your home. Thus, you should keep these records in the event you sell your home.

@mammanurse5

user17750693608

Level 8

There is no deduction for capital improvements. The cost of the improvement is addeed to the basis of the house. It will reduce your gain when it is sold.

Carl

Level 11

Property improvements to your personal use property (primary home, 2nd home, vacation home. etc) are not reported anywhere on your tax return. They do add to your cost basis of the property though. So you should keep all pertinent paperwork in a safe place, as it will come into play when any one of three things happens in your life.

1. You convert the property to business use such as a rental, or claim a home office for a business you own.

2. You sell the property.

3. You die.

GeorgeM777Answer

Alumni - Intuit

Do you rent any part of your home in 2022? If you converted part, or all, of your home into a rental property, then you may have to consider the issue of depreciation in connection with your rental.

@mammanurse5

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