turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Event: Ask the Experts about your refund > RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

eangler
New Member

Would a new lawn irrigation system be considered a sales tax major purchase

This was a new system not repair or maintenance.
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply
GeoffreyG
New Member

Would a new lawn irrigation system be considered a sales tax major purchase

A new lawn irrigation system for your home (or another building structure or property) would not actually be a purchase (or cost) eligible for a sales tax deduction.

Instead, such an expenditure is considered a property "improvement," and so it goes toward increasing the cost basis in that property.  This becomes relevant when you sell your home, or other property, in that there is less of a (potential) capital gain.

A quick example will help illustrate that.  Let's say that I purchase a building and pay $400,000 for it.  Several years later I sell the building for $600,000.  My gain is $200,000.  But if I've made "improvements" to the property in the meantime, like adding a new roof, or installing a lawn irrigation system at a cost of $10,000, then my "basis" in the property is now $410,000.  My gain, upon sale, is figured at $190,000, instead of $200,000, because my basis has been improved by $10,000.

Although simplified, this example does show what an increase in cost basis basically means.

For more details on this, and to verify that what is explained here is in fact correct, you may wish to look to IRS Publication 523, Page 12, where you will see "lawn sprinkler system" explicitly mentioned by the IRS as an item that increases cost basis in real property.  Here is a courtesy link to that document:

https://www.irs.gov/pub/irs-pdf/p523.pdf


Thank you for asking this important question.


message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies