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Business & farm
Thank you, and my apologies for any confusion. I mentioned depreciation because yes, the property has been used as a rental for the past three years. Prior to that, during the capital improvements phase that lasted four years, it was our primary residence.
If as you say improvements to one's own residence is not entered on a tax return, then perhaps this is a non-issue. We were just concerned that our true cost basis would not be accurately reflected in this year's tax return filing if we failed to add those capital improvements. We are looking at a capital gain of $2m at the moment but were told our capital improvements of $650k should be deducted from that amount because it should increase our cost basis.
I hope that clears things up, and I can start a new thread after if you still think that is appropriate.
Thank you again.