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Level 2
November 16, 2022
Question

ADU expenses

We were planning to build an ADU and spent some money for it's prep work for Structural and Design drawings, Geotech testing etc. Spent over $7000. Later we found out we our property is not able to handle the ADU due to the soil structure. Can we write off these expenses on my tax return?

 

    2 replies

    Level 15
    November 17, 2022

    Unfortunately, that's not tax deductible.  It might be considered a property "improvement" that you can include in the cost basis of your home. That may reduce your capital gains when you sell.  

    ppulickalAuthor
    Level 2
    November 17, 2022

    Thank you for your reply.