@ShannonBondoc wrote:
I received a notice from the City I live in that I could either pay the City to complete the sidewalk repair or hire my own contractor. For ease I decided to let the City due the work. I received a bill and paid them for the work. Since it was maintenance can I still deduct the expense? If so, where do I list this expense in Turbotax as it wasn't part of my Property Taxes?
If the property is a rental, the work might be a repair or an improvement, depending on what was done. Repairs are deductible against rental income, improvements must be depreciated.
If this was your personal home and not used as a rental or for business, then repairs are never deductible. Repairs are just things that responsible property owners are supposed to do to maintain their property values. If this was an improvement, it is not deductible on your tax return, but it can be added to the cost of your home when you sell, and may reduce any capital gains tax you owe at that time.
The difference between a repair and an improvement is that a repair restores the property to as-is or as-was condition, and does not improve the value of the property. An improvement, sometimes referred to as a betterment, makes the property better -- it makes the property worth more by adding value, or extending the useful life of the property or one of its major systems. Patching a hole in the roof is a repair because it only restores the property to as-was condition; replacing a 30 year old roof with a new roof is an improvement because it increases the market value of the property and extends the life of the roof system.
I suspect, if you had an existing sidewalk that was in bad shape, it was probably a repair, not an improvement. Although, if they dug it up, replaced the gravel base, and did a complete re-pour, it might be seen as an improvement.
It doesn't matter if you received a bill from the city, or even if it was included in your property tax bill, it is not deductible property taxes because it applies to your home only instead of providing a general benefit to all property owners in your city.
