Carl
Level 15

Investors & landlords

No. Any repairs done after the last renter moved out are not deductible at all. Repairs are only deductible if incurred while the home was classified as a rental. Since the work occured after you moved in, there's no way the home was classified as a rental and you definitely did not do the repairs with the intent of renting out the property again.

Now understand the difference between repairs and property improvements. For you, anything that is a "repair" is just flat out not deductible on any tax return, ever. But if you have property improvements (such as new kitchen cabinets) those are not repairs. Those are property improvements, and they add to the cost basis of the house.

However, since your property improvements were not done while the property was classified as a rental, nothing concerning those improvements are reported on any tax return, until the year you sell or otherwise dispose of the property. Even if that's 50 years from now.

Property Improvement.

Property improvements are expenses you incur that “better” the property. Basically, they retain or add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.

To be classified as a property improvement, two criteria must be met:

1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.

2) The improvement must retain or add "real" value to the property. In other words, when the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.

Repair

Those expenses incurred to return the property or it's assets to the same usable condition they were in, prior to the event that caused the property or asset to be unusable. Repair expenses incurred are only deductible if incurred while the property is classified as a rental. Repair costs incurred in the process of preparing the property for rent or for personal use are not deductible.