Can i deduct home improvement expenses in getting my house ready to sell.

[ecrowderrn]

I spent a bunch of money putting new tile, painting, and making general repairs after I listed my house for sale.  can I deduct these costs if I kept receipts?

[vjr62]

Where do I enter Home Repairs For sale of home for tax year 2016?
Vjr62 120817

[Opus 17]

Repairs are not deductible or an adjustment to the cost basis.

 Permanent improvement, such as a new roof, new furnace, or new carpet, or an adjustment to your cost basis. When you enter the interview for the sale of your home, TurboTax will offer you the choice of using a guided assistant to determine your cost basis.  Use the guided assistant, and enter your purchase price, your improvements, and other adjustments following the assistant.

[vjr62]

Where EXACTLY, do I enter Home Repairs for getting home ready for sale for tax year 2016 (sold in 2016)?
vjr62 120817

[Opus 17]

Home repairs are NOT deductible  on your personal home. You don't enter them anywhere. Home repairs are your responsibility as a homeowner to keep your property in good condition. Minor repairs, staging for a open house, and other costs associated with selling your house are simply not deductible.  Permanent improvements reduce your cost basis which may reduce your capital gains tax if you are subject to capital gains tax. But they are not deductions either.

[griffith-daniel]

What if the house was a rental and the repairs were made while I was actively trying to rent the home.  After the repairs were complete, the house had not rented yet, so I decided to sale.  Can I claim those repairs as expenses under the rental business?

[Judd · Accepted solution]

Hello escrowderrn,

Unfortunately, this answer is, "Yes and No."    The first question is whether you actually sold your house in 2013.  I am assuming you did, but if not many of these same principles will apply for next year’s taxes.

When you sell your house you subtract from the selling price your basis.  (What you paid for the place, with all the extras that got tacked on at closing, and all adjustments to basis that took place over the years.)  You also subtract the costs of sale (the expenses you are responsible for at closing, broker's fees if applicable and costs you expended getting the house ready to sale.)

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.  But it is important to note the distinction between improvements on the one hand, and repairs and maintenance on the other..  Improvements are more or less permanent changes to the house. These get added to your basis.  New tile would generally fall into that category.  But painting and 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.

All these expenses, however, regardless of their nature, are not deductible against general income on your tax return.  They only act to reduce the profit on the sale of the house.

If you are concerned about whether you have taxable income from the sale of the house, TurboTax can calculate that for you.  And you can read about the rules in the material I am sending you links to at the end of this response.

If you have any additional questions on this same topic please reply to this thread rather than starting a new one.  That way I will be notified of the new question and anybody else who looks at it will see the whole history of the thread.

Hope this helps you get your taxes done. Thank you for choosing TurboTax!   Have a great day tomorrow.

Judd

Sale of Your Home  Topic 701

Basis of Assets  Topic 703

Selling Your Home  http://www.irs.gov/pub/irs-pdf/p523.pdf

[sri_97]

Is there an IRS publication alluding to this? I made improvements to my rental before selling it off last year. I'd like to add the improv costs to the selling costs. Just wanted to read about it a bit more. Thanks in advance.

[miahbj]

We had electrical, plumbing work, new appliances, new ceiling fans, painting etc put in for our house 2017.  Put it on the market in February and when it did not sell by October, we had to move back in for financial reasons. Where can I deduct these expenses? Thank you.

[jroughgarden]

I would also like to know the answer to miahbj's question.

[macuser_22]

This is a 4 year old question but the answer is the same - expenses for a personal residence are not deductible.

[LRLB]

I sold my rental property in 2018, and made improvements prior to the sale. When I'm going through Turbo Tax I can't find where I should/can enter these expenses. There is a place to "add assets" and it states in the heading that home improvements would be added there, but it appears to apply only to the rental income and not take it off of the basis of the home.

[Maureen E Tait]

I forgot to add home repairs when I filed my 2021 taxes. Is there a way to go back and add them? I had to replace my air unit and replace my kitchen floor 

[PattiF]

If these expenses are for your personal home, they are not deductible as expenses. If you have a home office, the replacement of the air unit could be entered as an expense.