IRS Pub 551 Basis of Property provides a table of increases and decreases in basis. Above that table you will find the costs you can choose to deduct or to capitalize:
- Carrying charges, such as interest and taxes, that you pay to own property, except carrying charges that must be capitalized under the uniform capitalization rules.
- Intangible drilling and development costs for oil, gas, and geothermal wells.
- Exploration costs for new mineral deposits.
- Mining development costs for a new mineral deposit.
- Costs of establishing, maintaining, or increasing the circulation of a newspaper or other periodical.
- Costs of removing architectural and transportation barriers to people with disabilities and the elderly. If you claim the disabled access credit, you must reduce the amount you deduct or capitalize by the amount of the credit.
In general, costs that improve the property are capitalized (added to the basis). Costs to maintain the property (like property taxes) are deductible in the year they are paid.
Yes, a gain or loss from the sale of an inherited property is a capital gain/loss and can offset capital gains/losses from other investment sales, such as stock.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
