@jackiegangi wrote:
We had to pay special assessment for repairs on our condo building that totalled $7,000,000. Our share for our unit was $22,000. How is this treated for taxes?
First, you have to distinguish between repairs and improvements. A repair restores the property to as-was condition (like patching a hole in the wall or filling potholes in the parking lot). An improvement adds value or extends the useful life of the property. Improvements might include replacing windows, or adding structural stability to an older building.
Then, you have to consider if this is your personal home or income property (a rental). Generally speaking:
| |
Repairs |
Improvements |
| Personal home |
No tax adjustments. Repairs are the normal responsibility of every property owner |
Added to the cost basis, and may reduce your capital gains when you sell |
| Rental property |
Deductible in the year paid against rental income |
Added to the cost basis as an improvement and then depreciated |
