@madamescorpio wrote:
When Is Tree Removal Tax-Deductible?
Residential
Most of the time, tree removal is considered to be a repair on the property. After all, it’s done for a broken tree or a tree that died as a result of a pest swarm gone wild. It can put a serious risk to your home and local residents. This is considered a home repair if you have personal property, which means it is usually tax-deductible for the place where you live.
On the other hand, it can also be considered home improvement. For the IRS, the definition of home improvement is an expense that can help add value to your home. So, if it was done to improve your landscape, then it is not considered to be a legitimate write-off. If you are clearing the tree away to add space for an add-on that you want to rent, it might be a write-off.
I'm sorry, but this is false in several respects.
1. Home repairs on personal property are never tax deductible. Repairs on personal property are something that responsible property owners are expected to do to keep their property in good condition and are never tax deductible. Repairs and maintenance to commercial property is deductible against income. So removing a damaged tree might be deductible against rental income if the home was a rental on schedule E, and it might be deductible against business income if the property was a factory or workshop on schedule C, but it is not deductible if this is a personal home.
2. Home improvements are not "write offs" in any sense of the word, but home improvements add to the cost basis of the home, and may reduce the capital gains when the home is sold. An improvement is a betterment, it must make the property better, by adding value or possibly removing a hazard. Removing a tree as part of building an addition to the property would certainly be includable in the cost basis, since it is part of the cost of improving the real property. But removing a tree might also be includable in the cost basis if it can be legitimately considered a betterment of the property. Normally trees add value, so removing a tree is not a betterment. But if it is in a location that presents a hazard, or presents a hazard because it is diseases, then removal might be a betterment. The cost of betterments is added to the basis of the property and is not deductible, but may reduce future capital gains.
