Where do I report New Exterior paint

[BMcCalpin]

Are you referring to painting a house?

Option 1

If the house is your home and all you did was paint the exterior, then you don’t report the expense anywhere, because the cost of painting is not deductible.

The IRS says of repairs to your home:

“Repairs versus improvements.   A repair keeps your home in an ordinary, efficient operating condition. It does not add to the value of your home or prolong its life. Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. You cannot deduct repair costs and generally cannot add them to the basis of your home.”

https://www.irs.gov/publications/p530/ar02.html

Option 2

If the house is your home, and the painting of the exterior was part of a larger renovation of the house, then the cost of painting (and the other activities) are “capitalized”, that is, added to the basis of your home. The basis will be used when you sell the house to compute your gain (your gain is the sales price less your basis, more or less).

You don’t enter this in TurboTax, but you must track it yourself until the year you sell your house.

Option 3

If the house is a rental property (even partly), then the painting of the house is a rental expense and is reported on Schedule E under “Repairs and Maintenance” under Expenses.

The IRS says:

“Repainting the exterior of your residential rental property:

By itself, the cost of painting the exterior of a building is generally a currently deductible repair expense because merely painting isn't an improvement under the capitalization rules.”

Option 4

If the house is a rental house, and the painting of the exterior was part of a larger renovation of the rental house, then the cost of painting (and the other activities) are “capitalized”, that is, added to the basis of your rental house. The basis will be used when you sell the house to compute your gain (your gain is the sales price less your adjusted basis, more or less).

In TurboTax, assuming that you have already created an asset to depreciate on your Schedule E (you would have done this in the first year that you placed the rental house in service), then under Schedule E for this house, you would click on Assets/Depreciation and walk through the interview, telling the program that you have made an improvement. Note that you may be able to deduct the expense for the improvement – answer the questions and see.

“Repainting the exterior of your residential rental property

However, if the painting directly benefits or is incurred as part of a larger project that's a capital improvement to the building structure, then the cost of the painting is considered part of the capital improvement and is subject to capitalization.”

For Options 3 and 4, please see this IRS FAQ.

[kiweiss]

Great answer. I'm hoping you can help me figure out which option applies to my scenario. I live in my house and I'm about to start an extensive replacement project on some of its exterior trim. Seismic activity has caused it to separate from the house, and in some cases it has resulted in wood rotting from the rain. Can this be thought of as prolonging the useful life of my house? Once the bad trim has been replaced, my house will look so patched up that it will need a full exterior paint job. If the trim replacement can go toward adjusted cost basis, can the paint job that it necessitates also go in that category? Thanks so much.

[LeonardS]

You stated in your question that you live in your house which would indicate that it is not a rental property.  The long term damage cannot be claimed as a causality loss.  This deduction has been eliminated for tax years 2018 through 2025 by the Tax Cut and Jobs Act of 2017.

How you report the repairs and painting depends on the effect it had on your property.  It will either be a repair that is not deductible or a capital improvement that will be added to the cost basis of your property.

According to the IRS, capital improvements have to last for more than one year and add value to your home, prolong its life, or adapt it to new uses. ... The IRS describes repairs as things that are done to maintain a home's good condition without adding value or prolonging its life. 

If it does not meet the criteria for being a capital improvement, then it would be considered a repair that is not deductible. 

[kiweiss]

Thanks, Leonard. I'm trying to decide if the work I'm about to do prolongs the life of my home. I realize that replacing rotting exterior trim would restore the home to its original condition, which sounds like a repair. But if I don't do the work and the trim continues to rot, does that shorten the life of my home? If so, replacing the trim would prolong it. I should add that not all the trim is merely decorative. Some of it is part of the roof and deck railing.

[LeonardS]

Generally if what you are doing is a repair it is not a capital expense.  Painting and replacing trim would be considered a repair.  Repairing or replacing structural components would likely be a capital expense.