5695 Insulation Credit Question

[photoman]

I have a client that had insulation installed at the home he lives in. The invoice from the contrator shows 1650 house and 2000 garage. In reading the pub I cannot find where we can only use the amount for the dwelling .

Does anyone know if I can take the credit for the entire 3650 or not. or can I only use the house amount. The house and garage are on the same property , just the garage is detached

[DonPriebe]

According to the verbiage on the form, the credit is allowed for "your main home". I would define "home" more broadly than "house", to include all the living space in your residence including associated buildings used for personal (non business, non rental) purposes. That's closer to what Section 121 allows when you sell your main residence.

But the fact pattern here is odd. Why would someone insulate a detached garage unless it were heated? And why did the garage cost more to insulate than the house?

[AJsTax]

Insulation

Insulation is materials only.
Somewhere the defination of a qualify garage came up here.
Found it: from the literature with Haas Door.
The door must be installed on a conditioned space or an attached garage.
So I would believe the same qualifications would hold for insulation. The rules say the same property as qualifies for 121 exclusion.
I doubt if you would insulate a non- conditioned garage. I do not read that to mean only air conditioning, would also include heat in "conditioned" building.

So with what we know at this point I would say the cost of the materials for the house and garage would qualify

[photoman]

Thanks and the reason garage cost more is the walls and ceiling were done. As to why he did it he stays in garage a lot and has heating in there.

Thanks again

Ron

[Gretel]

I would be careful taking the credit for a detached garage. Seems like a stretch to me. My state says "attached garage" only, which makes sense to me. IRS could be different but I doubt it if it were challenged.

[Gretel]

I would be careful taking the credit for a detached garage. Seems like a stretch to me. My state says "attached garage" only, which makes sense. IRS could be different but I doubt it if it were challenged.

[Rae]

Straight from 5695 instructions

I have a client that had insulation installed at the home he lives in. The invoice from the contrator shows 1650 house and 2000 garage. In reading the pub I cannot find where we can only use the amount for the dwelling .

Does anyone know if I can take the credit for the entire 3650 or not. or can I only use the house amount. The house and garage are on the same property , just the garage is detached

"• Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home."

Note that it specifically says HOME.

[AJsTax]

I will respectfully disagree

I would be careful taking the credit for a detached garage. Seems like a stretch to me. My state says "attached garage" only, which makes sense. IRS could be different but I doubt it if it were challenged.

The rules state that the qualifying property is for Section 121 definition property. A personal use garage on the same lot would qualify for the 121 definition and exclusion.
Would not be a problem for a detached garage if it is heated and or air conditioned.

[AJsTax]

Read the rules a little further

"• Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home."

Note that it specifically says HOME.

that state that home as defined in Section 121. That would include a garage on the same property.

[Burke]

I agree. And since the garage is heated and he spends a lot of time there, I am sure it is on the electrical bill he receives for his residence -- even if it happened to be metered separately -- That means by insulating it, that bill should be reduced, as he will use less electricity -- which is the whole purpose of the credit to begin with. Now if he were running a business out of that garage, maybe not.