Carl
Level 15

Investors & landlords

What you have here is not a deductible expense. Period. It is a property improvement since it meets both requirements of the IRS to be classified as such.

 - The improvement becomes a permanent part of the property.

 - The improvement adds "real value" to the property.

If the property improvement is on non-business property such as your primary residence, 2nd home, vacation home, etc then you have nothing to enter concerning this on any tax return. But you need to file all paperwork associated with these property improvement with your HUD-1 and other acquisition documents that you were provide at the closing when you originally purchased the property. You will not need it again until one of three things happens in your life.

1) You convert the property to a rental or any other business use to include renting out a room or a home office.

2) You sell the property.

3) You die.