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rentalguy51
New Member

Can I expense work done on my septic system, new carpet and termite work on a rental home that qualifies as my primary home. Home sold same year.

Rental lease ended in June 2017. Home was sold in August 2017. Work had to be done to sell home. 

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Accepted Solutions
Coleen3
Intuit Alumni

Can I expense work done on my septic system, new carpet and termite work on a rental home that qualifies as my primary home. Home sold same year.

You have to differentiate between repairs and improvements.

The first thing to note is that expenses for making a house ready to sell can be listed as selling expenses when you are trying to determine if you have a profit and, if you do, how much.   Improvements are more or less permanent changes to the house. These get added to your basis.  New carpet would generally fall into that category.  But general repairs are more likely to fall under "repairs and maintenance."  If you get the house sold within a reasonable period of time (what is considered reasonable will depend on a variety of factors), although they end up in a different category than do improvements. You put them under costs of sale.  There is a special section in TurboTax where you get asked question about - and enter answers to those questions - on this topic.

Vacant while listed for sale.  If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses.

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1 Reply
Coleen3
Intuit Alumni

Can I expense work done on my septic system, new carpet and termite work on a rental home that qualifies as my primary home. Home sold same year.

You have to differentiate between repairs and improvements.

The first thing to note is that expenses for making a house ready to sell can be listed as selling expenses when you are trying to determine if you have a profit and, if you do, how much.   Improvements are more or less permanent changes to the house. These get added to your basis.  New carpet would generally fall into that category.  But general repairs are more likely to fall under "repairs and maintenance."  If you get the house sold within a reasonable period of time (what is considered reasonable will depend on a variety of factors), although they end up in a different category than do improvements. You put them under costs of sale.  There is a special section in TurboTax where you get asked question about - and enter answers to those questions - on this topic.

Vacant while listed for sale.  If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses.

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