Are these considered improvements to add to cost basis of house?

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  • AZ-Tax
    Senior Member
    • Feb 2008
    • 2604

    #1

    Are these considered improvements to add to cost basis of house?

    Replace furnace due to old one broken (or is a reason necessary)?
    Re roof house due to roof leaking in multiply areas?
    Rewire house?
    Replace kitchen applicances?
    Supplies & labor coverting linoluem floor to wood floor?
  • AJsTax
    Senior Member
    • Jun 2008
    • 629

    #2
    Mostly yes,

    The appliances are personal property and would not qualify.
    All the rest would qualify as depreciable capital improvements if the house was a rental and as such I would add them to the basis of the house.
    AJ, EA

    Comment

    • Jesse
      Senior Member
      • Aug 2005
      • 2064

      #3
      Is this rental property?
      http://www.viagrabelgiquefr.com/

      Comment

      • AZ-Tax
        Senior Member
        • Feb 2008
        • 2604

        #4
        Not rental property

        The house is NOT a rental property

        Comment

        • AJsTax
          Senior Member
          • Jun 2008
          • 629

          #5
          Was clear that it was not rental,

          but the same reasoning and qualifications that make an item deprecable for a rental can be used to consider an item to add to the basis of a house.
          AJ, EA

          Comment

          • taxea
            Senior Member
            • Nov 2005
            • 4292

            #6
            Originally posted by AZ-Tax
            Replace furnace due to old one broken (or is a reason necessary)?
            Re roof house due to roof leaking in multiply areas?
            Rewire house?
            Replace kitchen applicances?
            Supplies & labor coverting linoluem floor to wood floor?
            Anything that is necessary to keep the house in good condition is repair or maintenance and depending on the price and life of the item it is expensed or depreciated.

            Improvements are things that raise the value of the home. All of the items listed are expenses or depreciable...the depreciable items add to the basis of the house.

            In this case: Where I say "add to basis" I do not mean that the basis depreciation gets adjusted...each item is listed for the year as it's own depreciable item. The date, cost and item should be maintained in a list that it kept with the records for this house.

            Replacing an old furnace is maintenance...depending on cost and life it may have to be depreciated rather than taken as an expense in one year...does not add to basis
            Re roofing is an improvement...depreciate and add to basis records
            Rewire house is an improvement...depreciate and add to basis records
            Replace kitchen appliances is rental furnishings...depreciate don't add to basis
            New flooring-if throughout the house is an improvement...depreciate and add to basis
            Believe nothing you have not personally researched and verified.

            Comment

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