@FL33161 wrote:
Thanks for the link, DoninGA! I will look into it. Does this vacation home then comes under investment property? We always took standard deduction all these years. Can I add the mortgage interest when calculating the tax basis (and also property tax and insurance for all the years) and improvements (new roof, adding pool, etc)? Where does the ongoing maintenance comes fit in (like painting the house, landscaping, etc)
If this second home/vacation home was only used as personal use property then it is not investment property. When you sell the property you can include in the adjusted basis of the home the cost of any home improvements prior to the date of the sale. Also, any selling expenses can be subtracted from the Sales Price. You cannot capitalize any mortgage interest or property taxes for prior years.
Repairs and maintenance on the home are not included in the adjusted basis of the home.
