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Level 2
Nov 16, 2022 11:26 PM UTC
Question

ADU expenses

We were planning to build an ADU and spent some money for it's prep work for Structural and Design drawings, Geotech testing etc. Spent over $7000. Later we found out we our property is not able to handle the ADU due to the soil structure. Can we write off these expenses on my tax return?

 

    2 replies

    Level 15
    Nov 17, 2022 12:10 AM UTC

    Unfortunately, that's not tax deductible.  It might be considered a property "improvement" that you can include in the cost basis of your home. That may reduce your capital gains when you sell.  

    ppulickalAuthor
    Level 2
    Nov 17, 2022 3:57 AM UTC

    Thank you for your reply.