Yes. However, it's not a deduction so much as it is "added to the basis." This has the same effect anyway when you sell. Especially if this was your personal home, when you make a home improvement, such as installing central air conditioning, or paying assessments for capital improvements, you can't deduct the cost in the year you spend the money. But if you keep track of those expenses, they may help you reduce your taxes in the year you sell your house.
Money you spend on your home breaks down into two categories, taxwise: the cost of improvements versus the cost of repairs.
You add the cost of capital improvements to your tax basis in the house. Your tax basis is the amount you'll subtract from the sales price to determine the amount of your profit. A capital improvement is something that adds value to your home, prolongs its life or adapts it to new uses.
There's no laundry list of what qualifies, but you can be sure you'll be able to add the cost of an addition to the house, a swimming pool, a new roof or a new central air-conditioning system. It's not restricted to big-ticket items, though. Adding an extra water heater counts, as does adding storm windows, an intercom, or a home security system. (Certain energy-saving home improvements can also yield tax credits at the time you make them.)
Here are some more capital improvements:
The cost of repairs, on the other hand, is not added to your basis. Fixing a gutter, painting a room or replacing a window pane are examples of repairs rather than improvements.
Repairs are a deductible expense in the year paid for a rental, but unfortunately, never deductible for your personal home.
Yes. However, it's not a deduction so much as it is "added to the basis." This has the same effect anyway when you sell. Especially if this was your personal home, when you make a home improvement, such as installing central air conditioning, or paying assessments for capital improvements, you can't deduct the cost in the year you spend the money. But if you keep track of those expenses, they may help you reduce your taxes in the year you sell your house.
Money you spend on your home breaks down into two categories, taxwise: the cost of improvements versus the cost of repairs.
You add the cost of capital improvements to your tax basis in the house. Your tax basis is the amount you'll subtract from the sales price to determine the amount of your profit. A capital improvement is something that adds value to your home, prolongs its life or adapts it to new uses.
There's no laundry list of what qualifies, but you can be sure you'll be able to add the cost of an addition to the house, a swimming pool, a new roof or a new central air-conditioning system. It's not restricted to big-ticket items, though. Adding an extra water heater counts, as does adding storm windows, an intercom, or a home security system. (Certain energy-saving home improvements can also yield tax credits at the time you make them.)
Here are some more capital improvements:
The cost of repairs, on the other hand, is not added to your basis. Fixing a gutter, painting a room or replacing a window pane are examples of repairs rather than improvements.
Repairs are a deductible expense in the year paid for a rental, but unfortunately, never deductible for your personal home.