Tax laws on Rehab Property

Tax, SDIRAs & Cost Segregation
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Tax laws on Rehab Property

Massimo Salerno
Investor · Montréal, Québec · Member since 2016 · 33 posts · 6 votes

Hi all! During 2020 I was rehabbing a property. Had many challenges with delays, covid etc.. expenses really high and property is only ready for sale this week. My question is, am I allowed to claim the expenses ( the rehab) on income taxes.. not sure how it works since it is not a revenue property. Any insight will do.. thanks! Property is in Missouri. 

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  • Christopher Smith
    Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
    5y

    Add the expenditures to your cost basis in the property so you can recover them when you sell it.

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    5y

    @Massimo Salerno

    Are you a flipper?

    If there are costs directly related to the property - most likely capitalized and factored when you sell the property
    If there are general business costs not related to the property - you may potentially be able to expense those costs.

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  • Massimo Salerno
    OP
    Investor · Montréal, Québec · Member since 2016 · 33 posts · 6 votes
    5y

    Basit Siddiqi, like interest on loans and legal fees? .thanks !

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