can i add to basis of inherited property with materials and taxes paid over the years

[cram1]

i inherited a property that was unlivable. Can i use the money amount that i put into the house for a roof, plumbing, electrical, cabinets, flooring, insulation, appliances, utilities, insurance, and taxes to add to the cost basis? this is a property in Texas. I have put many years of labor and materials and kept the house up costing me a small fortune. thank you

[LeonardS]

Yes, you can add the cost of capital improvements to the basis of inherited property.

 A capital improvement is something that actually adds to the value of the home or increases its usefulness.  Some examples of capital improvements are:

• Remodels and room additions (including decks and porches)
• New or upgraded landscaping, irrigation, sprinkler system
• Hardscape such as pavement, block or retaining wall, patio
• Fencing
• Swimming pool, spa
• Storm windows, doors
• New roof
• Central vacuum or security system
• Upgraded wiring, plumbing, ductwork
• Central heating, AC, humidifier
• New furnace, water heater
• Filtration, soft-water, or septic system
• Built-in appliances
• New flooring or wall-to-wall carpeting
• Upgraded insulation
• Satellite dish

[cram1]

thank you very much. will the years of taxes apply as well?

[ErnieS0]

No. Property taxes are an expense so you can't add them. Additionally the previous owner may have deducted the tax on their tax return.

[billberrymanesta]

Hi, how are these capital costs made by the executor entered on TurboTax?  When I designate the house as inherited, TurboTax does not provide an option to add these costs. I suppose that I can enter the inherited basis plus improvements as the alternative provided by executor. Can anyone help?

[RobertB4444]

You will add the improvements to the basis of the received property.  The total is your adjusted basis in the property for the purpose of calculating your profit on the sale.  The improvements are not entered separately.

@billberrymanesta 

[billberrymanesta]

Thanks, but TurboTax doesn’t have an entry for additions to basis for inherited property.  Where in the entries do I plug in that number?

[ThomasM125]

The property would only be listed on your personal tax return in the year you either sell it or rent it out. The additions to cost basis you would note in your records to be used to report the cost of the property on your tax return when you sell it or begin renting it out.