Where do i enter seismic retrofit expense

[cl080141]

where do I enter california seismic retrofit cost

[MaryK4]

You will enter as a depreciable asset.  It is a betterment to the building structure and is treated as an improvement to the building.  You must capitalize the amount paid.  Just to clarify, are you entering for a rental property or home office?  

If it is for your personal residence, you would not deduct but add to the basis of the home.

[cl080141]

I took this from the internet.  I paid $6000 total for retrofit, but was refunded $3000.

Is earthquake retrofit tax deductible?

If your retrofit is completed on, or after, January 1, 2017, and before January 1, 2022, you may qualify for a credit on your taxes. ... If you do this, you can get credit for 30% of the qualified costs of your seismic retrofit.

[cl080141]

Yes, this is a personal residence.  - own home

[cl080141]

Also, included in the cost of the retrofit was a $500 permit fee - would you be able to deduct that fee also??

[JohnW152]

This wasn’t a credit that was available on your federal or California state return, and there’s nothing for you to enter on your federal or state tax return.  

Earthquake Brace + Bolt (EBB) was a grant program that provided eligible California homeowners up to $3,000 towards residential seismic retrofits.

As a grant program, it wasn’t a credit that a taxpayer could claim to offset tax.  

The window for participation in the Earthquake Brace + Bolt program has closed.  Please see the Brace + Bolt Program link in the state’s Earthquake Recovery site for more information.  

As MaryK1101 suggests above, if these changes were made to your personal residence, you can add them to the basis of the home.  Permit fees would be included. 

[bonbon23]

Is there a credit in California for the retrofitting expense.  It appears to me it is 30%.  In that event, where does it get entered on the CA return?  thank you

[cl080141]

Exactly - I couldn't get an accurate reply from Turbo Tax (person said to sign up for Turbo's expert help) - so contacted CA. Tax Bd.   There is a special California form we need to use - Schedule 540A - and you need to fill it in from the top she said.  (you can down load it from them) .  I tried to find out if it was Federal tax credit, but couldn't get any info.  

[cl080141]

See my latest reply please.

[DaveF1006]

@cl080141 Please read the following Turbo Tax post written by a staff of tax professionals. A Seismic retrofit is not eligible for a federal energy credit. It does not fit in with the energy classification criteria listed in the post. 

There also not a state credit offered either. According to this unofficial source, you could have applied for a grant to receive $3000 grant through Earthquake Brace + Bolt (EBB), a program jointly administered by the California Earthquake Authority (CEA) and the California Governor’s Office of Emergency Services. The grants help offset the cost of seismic retrofits that brace the cripple walls of older homes, when present, and bolt houses to their foundations, making them less vulnerable to earthquake damage. Unfortunately, this offer was only valid from 10/27-12/01 2021 to apply for the grant.

As far as the advice about reporting on a Schedule 540, this is only if you received this grant from the State of California and you wanted to offset this income with a subtraction. If you did not receive a grant, there is nothing to report in this schedule.

About the best thing you can do is follow the tax advice offered by MaryK1101 and JohnW152 and add this as a basis to your home.  

[ Edited 02/25/22|04:50 PM PST]

[cl080141]

I did receive a special grant from California -  and, I had the retrofit done to my home.  It cost me $6000 and I received a refund of $3000, last year.  There was a bill passed in CA. that says we are also allowed a 30% tax credit - so I would assume that means 30% of the $3000 I had to pay = $900.  I was told by a CA. tax rep that I need to fill out form 540A - from the top -she emphasized - in order to get that credit on my CA. return.  As far as the Fed return, I was unable to reach someone at Fed tax.

[cl080141]

See my reply

[DawnC]

Did you report the income from the grant?    There is no federal or CA state tax deduction for seismic retrofits at this time.   You should add the net cost of this project to the basis of the property to lower any gains when you sell it.  

AB-234 Income taxes: credit: seismic retrofits -  I believe this is the bill you are referring to and it has only been introduced, not passed into law.   

[cl080141]

Bill Text - AB-428 Income taxes: credit: seismic retrofits. (ca.gov)  What about this bill that was passed  in 2015?

Doesn't it count?  

The $3000 refund is not taxable according to what I have read.

[RobertB4444]

@cl080141  That bill was passed in 2015 and effected your 2016 taxes.  There is no tax break in 2021 for residential seismic retrofits.  However you can apply to receive a rebate on money you spent on that seismic retrofit from the California Earthquake Brace and Bolt program.  That is where that $3000 comes into play and you are correct - since it is a reimbursement of money that you have spent it is not taxable.