Hello, my wife had a house that was used as second home. She sold her house in 2021. We are filing a joint return and I am trying to figure out the followings:
1. She put in a new roof and new driveway in 2014. According to page 9 of pub 523, both the roof and driveway are improvements that can be added to the cost basis. Total was about $10,000. Would I add the full $10M to the cost basis, or would I need to use the depreciated amount, i.e., $10,000 minus $2,500 (for the last 6 years, estimated) = $7,500?
2. As a divorce settlement, she paid her ex-husband $11,000, to get the house fully in her name. If the original price of the house was $90,000 when they jointly purchased the house, what can she use as the cost basis of the house? Can she add the $11,000 that she paid her ex to the $90M original purchase price to increase the cost basis?
3. It appears the repair and cleaning costs done by outside companies, and the supplies that we purchased on our own were part of the sales expenses? If so, how do we report them, as adjustment to costs in column g of Form 8949?
3. My wife, her sister, and I all spent time to repair and clean the house for it to be ready to sell. Can we report the time that we spent as part of the cost basis? If so, what should I use as the hourly rate?
3. I looked at the TurboxTax software (schedule D and form 8949), it does not appear to have an input option for sale of second home (it does for main home), where and how do I input the sale of second home?
Thank you for your help in advance.
