When doing taxes can you deduct home improvement expenses every year or only the year you sell?

Question by Erin: When doing taxes can you deduct home improvement expenses every year or only the year you sell?
I was told that you could deduct home improvement expenses until the year you sold your house. Is this true?

Best answer:

Answer by dustoff
You don’t “deduct” them at all. When you sell, the cost of improvements can be used to adjust your acquisition cost basis – which will decrease any capital gain tax due.

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3 thoughts on “When doing taxes can you deduct home improvement expenses every year or only the year you sell?”

  1. No capital improvements are not deductible from your tax bill. They are written off against capital gains when you sell the house.

  2. You cannot claim any home improvements until you sell the house. However, they are bringing back the deduction for energy efficient items such as doors and windows for 2009. See a tax professional for assistance.

  3. Home improvement costs generally increase your adjusted basis to your house and not deductible during current year. If you took a loan to pay for these improvements, the interests you paid are deductible. Also, if your home improvement is only repainting the house, it is not considered home improvement and you cannot add the costs to your adjusted basis regarding capital gain taxes. But if the repainting job is part of a bigger home improvement project, then it’s ok to add the costs to the your adjusted basis.

    Now make sure you keep very good records on the costs for home improvement so you don’t run into problems when you sold your home and report it to the IRS.

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