You'll need to sign in or create an account to connect with an expert.
The cost of improvements to your home is added to the cost basis of your home. It will thus reduce your capital gains.
The cost of improvements to your home is added to the cost basis of your home. It will thus reduce your capital gains.
Property improvements are not deducted. Not ever. Property improvements are entered in the assets/depreciation section and depreciated over time. Then when you sell the property you are required by law to recapture all depreciation taken and pay taxes on it in the year you sell.
If you did not depreciate your property improvements, then you are required to reduce your cost basis by the amount of depreciation you "should" have taken.
So if you didn't depreciate your property improvements, go ahead and enter them in the assets/depreciation section with their "real" date placed in service, even if in a prior year. The program will then take care of it for you by reducing your cost basis in the end when all done, then "recapturing" that depreication and taxing it appropriately. Recaptured depreciation is taxed anywhere from 0% to a maximum of 25% depending on your overal AGI for the year.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
SLYKTAX
Level 5
SLYKTAX
Level 5
Sewflo08
New Member
GDJR
New Member
house271
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.