@taxdean wrote:
I always thought, at least in a normal, non-estate, home sale situation regarding capital gain taxes and such, that near-term costs in preparing a home for sale were (directly, not 'miscellaneously') deductible.
No, that is not the case and has not been the case since 1997. The Taxpayer Relief Act of 1997 eliminated any deductions for "fix-up" and/or repair expenses prior to the sale of real estate.
@taxdean wrote:
...I assume that a home improvement added between the time an appraiser valued the property and when it is sold, would increase the "cost basis" and therefore would be, in effect, deductible....
Yes, home improvements are different; they are not treated the same as repairs. Rather, improvements are added to the basis of the property and effectively reduce gain (or increase loss) on a subsequent sale.
Similarly, a credit given to the buyer would increase any loss (or decrease gain) but, regardless, any pre-sale expenses incurred (other than actual improvements) to make the property more attractive to a buyer are simply not deductible expenses.
