If I complete home improvements (roof., Paint) in order to help sell my house, can I deduct these expenses on my taxes. I am moving for a job if that makes a difference.
Q1 14 years Q2 155,000 Q3 270,000 Q4 married
You can deduct fixing up expenses off the sales price of your home when you are calculating whether you have a taxable gain. Sales price - Tax basis - commissions and closing costs - fixing up expenses = taxable gain. This can be offset by your exclusion of $250,000 (single) or $500,000 (married) if this is your principal residence and you lived in the house as such for 2 of the last 5 years. The fixing up expenses cannot be used to offset other income you may have.
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Elder Law Attorney
If you've lived in the house as your primary residence for at least 2 of the last 5 years, a single person can exclude $250,000 of gain and a married couple $500,000.
The repair/selling expenses only go to increase your tax basis when calculating your capital gain on the sale of the home and so they'd be deductible, but probably worthless because you can't use those expenses to offset other income...
Q1: How long have you lived in the house?
Q2: How much did you pay for it?
Q3: How much are you selling it for?
Q4: Are you married?
I agree with the above.
Also, I assume that your home has been used by you and your spouse entirely as a primary residence and would meet the criteria for the primary residence exclusions of $250,000 (single)/$500,000(married) of capital gain as already explained in the other attorney's answers.
Internal Revenue Code 121 and its applicable Treasury Regulation sections address the primary residence exclusion for capital gains on the sale of primary residences.
However, in the event that you have used part of your home as a rental property in which you collected rent from a tenant, hopefully you have reported this income and related expenses on Schedule E, page 1, of your IRS form 1040 individual income tax return. Further, if you have rented part of your home, this will have an impact to how much of the primary residence exclusion you may be entitled to any capital gain calculated upon the sale of your home. You may have income tax to pay on the rental portion of your home. Also, are any of these "home improvements" you are considering making impacting the rental portion of the home, therefore requiring an allocation of those disbursements to the primary residence portion and rental portion?
It is a very common practice for people to have rented a portion of their home to a tenant at some point and, if you have done so, please consult your tax attorney and accountant to determine the income tax impact when you sell your home, taking into consideration your new disbursements you plan to make to help make the house more attractive to potential buyers.
All best and good luck on the sale of your home.
Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.
Legal disclaimer by Suzanne Alexandra Ascher, Esq: My answer is strictly for information and education purposes only and therefore my answer does not form any attorney-client relationship and attorney-client privilege between me and you. These questions and answers on AVVO.COM are no substitute for actual qualified legal advice by an actual licensed attorney in good standing with the bar who can become fully informed of your entire situation above and beyond the limited description of your situation in your question. Further, nothing posted in this public forum of AVVO.COM is deemed confidential or privileged communication. Finally, in accordance with IRS Circular 230 disclosure, federal (United States) tax advice provided in this communication is neither intended nor written to be used, and cannot be used, by to avoid penalties under the Internal Revenue Code or to promote, market, or recommend to anyone a transaction or matter addressed in this communication.