@MarkAU wrote:- The total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-
- Two percent of the unadjusted basis of the eligible building property; or
- $10,000 (for questions about how to calculate the unadjusted basis, refer to "Figuring the Unadjusted Basis of Your Property" in Publication 946
- You make the election to use the safe harbor for each taxable year in which qualifying amounts are incurred.
I highlighted a couple of important aspects of that election. The TOTAL repairs, maintence, and improvements need to be under that threshold. So if the total of any other repairs, maintenance and improvements were over $500, that puts you over the $10,000 limit.
Also, it is the LOWER of 2% of the Unadjusted Basis or $10,000. So in the event the Unadjusted Basis of the home is under $500,000, the threshold is less than $10,000. I realize that if you are in California that may not be an issue. 🙂
