More people than ever are "stuck" with houses they can't sell.
One of my clients has been "stuck" with a former residence since 2007. They gave up in 2008 and 2009 and rented out the house, but have accepted they will have to take a loss. They cleaned up the house and kept renters OUT. House was not rented AT ALL in 2010 and there was no attempt to do so.
Many of the expenses continued. Almost $1000 in homeowner "association" dues, various other big-ticket expenses. These are all "operational" expenses, not improvements.
I told them the house was NOT for rent, so these expenses would NOT be deductible. I believe this to be the case.
However, in lieu of deducting these operational expenses, can they be accumulated into the basis of the house??
One of my clients has been "stuck" with a former residence since 2007. They gave up in 2008 and 2009 and rented out the house, but have accepted they will have to take a loss. They cleaned up the house and kept renters OUT. House was not rented AT ALL in 2010 and there was no attempt to do so.
Many of the expenses continued. Almost $1000 in homeowner "association" dues, various other big-ticket expenses. These are all "operational" expenses, not improvements.
I told them the house was NOT for rent, so these expenses would NOT be deductible. I believe this to be the case.
However, in lieu of deducting these operational expenses, can they be accumulated into the basis of the house??