topic Is a cost of property improvements such as this deductible? in Deductions & credits

Is a cost of property improvements such as this deductible?

isaoyama — Sun, 28 Feb 2021 21:20:38 GMT

I recently purchased an undeveloped land and installed an electric power service (including underground power lines, junction boxes, etc.). Is the cost of property improvements such as this deductible?

Re: Is a cost of property improvements such as this deductible?

DavidD66 — Sun, 28 Feb 2021 21:32:13 GMT

No, those costs are not tax deductible. Instead, they are added to your cost basis and will reduce any gain (or increase a loss) upon disposal of the property. If you develop the property instead of selling it, those costs could be capitalized and depreciated.

Re: Is a cost of property improvements such as this deductible?

isaoyama — Sun, 28 Feb 2021 21:39:34 GMT

Good to know. Thank you for answering my question, DavidD66.