The cost of improvements would be added to basis.
An election can be made to capitalize otherwise deductible expenses.
April 28, 2023 2:14 PM
Can you clarify that? I have been reading for over an hour trying to find the answer. This is close, but there are conflicting answers. If an expense is otherwise deductible, it can be capitalized by election. That would mean anything that goes on a Sch E can be capitalized, including interest, property taxes, utilities, travel expenses, -everything. Yes, or no? We are talking of a period when the house is not in service but will be.
People keep saying you can't add anything but improvements to basis during this time. It can't be both ways. Need a straight up answer.
Other question: how do you go about doing a capitalization of deductible expense election? Is there a certain form? Do you simply add a statement page to your taxes? How?
