Costa Mesa, CA · Member since 2015 · 8 posts · 0 votes
My accountant tells me that yes, if I have repairs like windows and fixtures fixed when I'm still occupying the house, I can deduct these. Is this true? She says as long as I move out fairly quickly after that it's clear that I made the repairs to prepare the house for renting.
@Victoria Stone I just replied to another one of your posts. I think you need a new accountant. While you might be able to argue that the repair was done in preparation for renting, It would still not be deductible. It would be added to the basis.
I am guessing this "accountant" is not a CPA. I am serious, I think you need a new accountant. Perhaps @Steven Hamilton II will chime in.
@Victoria Stone I just replied to another one of your posts. I think you need a new accountant. While you might be able to argue that the repair was done in preparation for renting, It would still not be deductible. It would be added to the basis.
I am guessing this "accountant" is not a CPA. I am serious, I think you need a new accountant. Perhaps @Steven Hamilton II will chime in.
I have read if the property is 'in use' it can be deducted.
I have heard "In use" can mean it is advertised for rent. In general repairs made before it comes a rental are only added to your cost-basis as @Ned Careypoints out.
Hope you are not skipping a huge tax-free gain by not selling this. If you have a lot of equity @Victoria Stone it may be best to sell within 36 months.
The real accountants will chime in. I am not one. This is my last ever tax-related post!
Offering tax advice is a thankless job to us minions. If I am right it won't matter. When I am wrong by one little thing I get ripped up and down. Good luck!
@Steve Vaughan, you are so right, you offer free advice on a question with limited info and context from your own real life experience doing this for 20 years, just to be helpful and and 10 people who have owned one rental for a week dog pile you with the one exception or obscure rule they found just to try and prove you wrong.
@Victoria Stone take the advice of @Ned Carey get a licensed tax professional in who owns rental property themselves. Good luck!
Neither @Ned Carey, @Steve Vaughan or @Cameron may be tax accountants, but they are dead correct.
Repairs and maintenance made BEFORE a property is put into service are added to the basis. Repairs and maintenance made while a property is still your primary residence is such a grey area that even as a tax professional, I wouldn't advise one way or the other without knowing a WHOLE lot more about the property, you and your future intentions. In general, the IRS will say that a repair done while it's your primary residence is a personal expense - even if you are getting it ready to rent. Arguably, these things needed to be repaired because of your residency there and you are therefore making the property whole for the damage and wear and tear YOU did to it.
That is why accountants are selected very carefully on a business, just like selecting an attorney for a criminal defense, if selected wrongly, it will cost you to correct it.