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posted Jun 6, 2019 12:44:31 AM

Can I add improvements done before I turned my primary home into partial rental/primary to the cost basis when i sold the house at a loss?

I bought our primary house in 2005 at $630,000. Then we did major improvements like adding garage/family room and remodelled kitchen with cost of $100,000. Then in 2014, we rented out the lower level of the house out for 3 years while we still lived there. During this period of time, we had new bathrooms and hardwood floors, costing about $25,000. In 2018, we sold the house at $735,000. Can i claim a loss? If I can, can I add the $100,000 to the cost basis? Thank you!

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1 Best answer
Expert Alumni
Jun 6, 2019 12:44:33 AM

Yes, you can add the improvements you made for $100k to your cost basis. You can also add to the cost basis the improvements you made in 2014. Note that you should not have claimed that amount of $25k as repairs in your rental expenses.

1 Replies
Expert Alumni
Jun 6, 2019 12:44:33 AM

Yes, you can add the improvements you made for $100k to your cost basis. You can also add to the cost basis the improvements you made in 2014. Note that you should not have claimed that amount of $25k as repairs in your rental expenses.