AnnetteB6
Expert Alumni

Investors & landlords

No, the cost of the repair cannot be deducted directly on your 2019 return regardless of whether that portion of your house is now being rented.  Since the cost was incurred in 2018 and the part of your home was not rented until 2019, you would not deduct it on your 2019 return.

 

To know if there is anything you can do on your tax return with regard to this cost, you need to determine if the 'major repair' was a repair or an improvement.  A repair would restore the bathroom to good working condition such as the case if something were broken or damaged and was in need of repair.  An improvement would make your property more valuable or extend the useful life of the components of the bathroom.  An improvement would also be a permanent part of the structure of your home.  

 

When you begin renting a portion of your home, that rental portion will be depreciated based on the square feet of the rental space versus the total square feet of your home.  When the information is entered to calculate the depreciation, the cost basis for your home is one piece.  If your 'major repair' can be considered an improvement and not a repair, then the cost of the repair will be added to the cost basis of your home.   

 

 

@sviyer

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