Cost basis tax question

[Josh Ferona]

Hello, I recently bought a home for about 30k and the home had about 16k in repairs to get it rent ready. I believe this will be added to the cost basis and the cost basis will be 46k but I just wanted to make sure. Or does some of this count toward expenses/same Year deduction?

Also, I understand that while a tenant is living in the home, certain items can be counted toward expenses instead of added to cost basis. But how about when a tenant moves out and repairs need to be made to the home before a tenant move again. Are those repairs added to cost basis since a Tennant does not currently live in the home? 

Thank you 

[Linda Weygant]

Originally posted by @Josh Ferona:

Thank you all for your responses about this. I really appreciate you all taking the time to respond. It makes a lot more sense now!! I will be sure to go over all of this with a cpa during tax season next year.

@Dave Toelkes thank you sir! That really clears up everything for me! That is what I was thinking, just wanted to be sure from someone else as well!

I strongly recommend that you engage with a tax professional BEFORE next tax season.  Generally, November/December time frame is best to onboard with a new tax pro, but honestly, it's never too early.  Here's some good reasons why:

1.  Your tax pro is not in the thick of tax season and will generally be able to devote all necessary resources to you.

2.  If your new tax pro has some tips to help you save taxes this year, you still have time to do so.  For most strategies, 12/31 is a hard cut off to implement them.  Some strategies will allow you to still take advantage into the next year, but you don't want to hear "you could have saved money if you'd have done xx by 12/31"

3.  Your tax pro can then put you into their normal pre-tax season work flow.  You'll be signed up for their news letter right away (which can help you understand strategies).  You'll also be on their radar for compliance issues such as 1099 form preparation, year end reasonable compensation calculation true-ups, etc. 

Best of luck to you!