Taxpayer asks:
Taxgirl, where do you deduct expenses for fixing your home? My neighbor said that I can take off the cost of fixing my roof on my taxes but I don’t know where to put it.
Taxgirl says:
Hmm. I’m not sure that you should be getting your tax advice from your neighbor.
Generally, repairs to your primary residence are not tax-deductible. There are some exceptions to this rule, depending upon your personal circumstances, such as:
1, If you claim a home office deduction, you may be able to take a pro-rated deduction for home repairs.
2, If you rent out part of your home, you may be able to take home repair expenses related to the rental.
3, If you are making a repair subject to the casualty/loss rules, there may be an adjustment (though technically speaking, the cost of repairing damaged property is not part of a casualty loss – but you may be able to use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV).
Repairs to your home may affect your basis for purposes of calculating a gain or a loss at sale, but your run of the mill home repair expense – even if significant – is not deductible on your federal income tax return.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
In some instances, say if he imroved his roof. Wouldn’t he be able to add this to his basis
Jerry, absolutely! But that wouldn’t be something that you would include on your income tax return as a line item. It would only apply if there was a gain at sale – and then would be included only for purposes of calculating the amount of any taxable gain (not as a deduction).
This was just what I was looking for. So… here’s my follow-up question.
I have a home office. It’s 18% of my overall home sf. We recently completed an interior remodeling of my entire downstairs (where the home office is). We spent $100k.
So, do I enter $95k in the whole house repair expense (includes drywall, furnace, insulation, etc), and the $5k in the home office expense (that was specifically for paint, light fixtures, etc. of the office)? What about listing the total 100k remodel as an asset, in the home summary? Do I do both?
It makes a big difference on our refund amount. and while I want a nice refund, i dont want to be stupid and double-dip that’ll cause more problems or red flags later.
You treat the expenses separately.
With respect to direct expenses (those that you mentioned were specifically for your home office), you would list those at 100%. With respect to indirect expenses (those, for example, like your furnace that affect the whole house), you would pro rate those expenses. Do not include expenses that are clearly not associated with the home office at all.
Thanks! I understand the difference between home office vs. whole house.
The question is really at what point does repair expenses (to be used as a business expense for the portion of the house that is the home office) become a home asset (and therefore not used as an expense, rather depreciated over time)?
TurboTax says: “Repairs for your entire home are those …including repainting your whole house (inside or out), or fixing your furnace. More extensive work, such as remodeling, or adding a new roof, should be added under the Asset sections.”
So… what is ‘more extensive work’ vs. just a repair? I got a new furnace. We had to replace the water line. All the paneling was replaced with drywall. We rebuilt the deck (where my clients come in). Where do these fall? These are the mysteries! 🙂
The related question I have is…
I sold a house last year, but in order to sell it I to repair the foundation. Otherwise they buyer would not have taken the deal. This put be around $12000 in the hole on the sale of the house. Is there some way to declare this loss?
Todd, it wouldn’t be a loss since you can’t take losses on a personal residence. It would simply be an adjustment to basis, meaning that your costs were higher for purposes of calculating any capital gain. This is, of course, assuming it’s a personal residence with no other relevant facts.
Kelly, The foundation of my house was infested with ants and I had to spend $18,000 to fix it, can I claim this as a casualty loss subject to the $100 and 19% rule? Any info would be great
Hi Scott, I don’t know for sure but I think the answer is no. The IRS has held termite and moth damage to be “progressive deterioration” and thus not subject to casualty loss rules. However, if it were some kind of freakish ant storm or some other “identifiable event that is sudden, unexpected, or unusual”, it would qualify. See IRS Publication 547 for more details: http://www.irs.gov/publications/p547/
Can I deduct the interest on my lowes credit card, seeing that everything on it(the card), was purchased to repair/improve my dwelling. ex. storm doors.