Deductions allowable in selling a second home

[Theodb]

Can expense for travel and living expense while making repairs and improvements to a second home that is up for sale be deducted to determine the capital gain?

[MarilynG1]

Expenses for making improvements to your second home prior to sale can be added to the Cost Basis of the home you are selling, which reduces your Capital Gain. Minor expenses can be considered 'Selling Expenses', which also reduce any gain on the sale of your 'investment property'. 

If you lived in the house for two of the last five years, any gain could be excluded, but you could not deduct expenses. 

If the home had previously been a Rental Property, then travel expenses to the home would be deductible, as this was taxable income-producing business property.

However, IRS Publication 523 does not specifically include cost of travel to fix up an investment property in another location as deductible.  

Click here for info from IRS Pub. 523. 

[Hoff1]

 The second home was inherited.

  I understand the Fair Market Value, but can we deduct costs for remodeling the pool, air cond work, fence, etc. from the money received from the sale?

  Also, since this house was an inheritance to two siblings, do I put half of everything on my taxes?

[DaveF1006]

You would add the improvements you made to the cost basis of the house.  for you, the cost basis is the Fair Market Value. Yes, you would report 1/2 in your return and your sibling would report 1/2 in their tax return.