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Level 2
posted Feb 28, 2021 1:20:38 PM

Is a cost of property improvements such as this deductible?

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?

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1 Best answer
Expert Alumni
Feb 28, 2021 1:32:13 PM

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. 

2 Replies
Expert Alumni
Feb 28, 2021 1:32:13 PM

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. 

Level 2
Feb 28, 2021 1:39:34 PM

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