House-Hacking taxes for repairs & upgrades (occupied side)

Tax, SDIRAs & Cost Segregation
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House-Hacking taxes for repairs & upgrades (occupied side)

Jonathan Balascsak
Rental Property Investor · Eastern NC · Member since 2020 · 13 posts · 5 votes

Hey Y'all!

Situation: owner occcupied house hacked duplex we live on 1 side a tenant on the other.

  As I wait for my consult date with a CPA, I am getting my Stessa in order. A lot of repairs and upgrades were done to the side that I am currently occupying. (new LVP, ceiling fans, electric, stainless appliances ETC.) We will most likely be moving out of the property this year and renting out the remodeled side. Can I deduct those expenses next year so they are deductible? All the repairs were done to prepare the property for tenants on both sides.

Thanks in advance :)

-Jonathan

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    5y

    They simply get added to your cost basis for depreciation, they don’t get expensed immediately.

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  • Daniel HymanBusiness Member
    CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    They will likely be capitalized and depreciated once you do rent out that side. So, you'll eventually get to deduct the expenses if you rent out that side, but not all of it in year 1.

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