Repair and Maintenace Expenses on Sale of Inherited House

[syoung123]

My wife inherited a house from her mother and she sold it in 2024.   We are trying to figure out the net capital gains or losses from the sales of the inherited house.

1.  Are the repair and maintenance expenses incurred only from the time of the advertising the sale to date of sale allowed?

2.  What types of repairs and maintenance expenses can be deducted?  Are costs to clean the house to be ready for sale, travel miles to the inherited house to clean up, airfare, food purchased while doing cleaning and repairing, payments for lawn mowing and yard cleanup, payment for electrical repairs, allowed as deductions to the sale proceed?

3.  Do replacement of hot water heater, and well pump, allowed as deductions?  If so, are they considered as improvements or repair/maintenance expenses?

[Vanessa A]

If this property was NOT a rental property and just an inherited property that was then sold, repairs and maintenance are not deductible expenses UNLESS it was something like a remodel or a roof replacement that extended the useful life of the home.  In that case, it would be added to the cost basis of the house.  

Things such as painting, mowing the lawn, repairs to electrical, etc are not deductible expenses or expenses that can be added to the cost basis of the house. 

Airfare to the residence is not a deductible expense. 

The replacement of the hot water heater and well pump would be added to the cost basis of the house.

[syoung123]

Thank you for your response.  I thought the costs of preparing the inherited house for sale are allowed as deductions.  I saw some community posts that said some costs are allowed.  I read page 6 of the form 8949 instructions, and they don't appear to have specifics.  Are there publications or  instructions that have more detailed lists showing what expenses are allowed and what are not allowed ?  Thank you.

[DawnC]

Those posts may have been regarding an inherited home that was rented out.   If you don't live in the home, and you didn't rent it, it is an investment property.   See this IRS page which has links to Pub 550 and Schedule D.

[syoung123]

Thank you for your reply.  I searched thru pub 550 and could not find the section(s) that described the expenses that are deductible.  Could you direct me to the specific pages in pub 550?  Also, for inherited house that was not rented out nor occupied for personal house, if it is classified as investment property, are capital losses allowed of off stock sale capital gains on form 8949 and schedule D?  Thank you.