Deductions for property rehab and sale

[mhartnett]

What is the name of your state?
I am in Massachuetts.

I owned some property which my brother lived in while he was in school. It was considered a second home.

I sold it last year but needed to do a full rehab before I sold it. (He didnt take very good care of it) The rehab cost a little over 10,000 dollars not including my time.

Can I deduct these expenses on my taxes?

Thanks for any advice

[LdiJ]

Originally Posted by mhartnett

What is the name of your state?
I am in Massachuetts.

I owned some property which my brother lived in while he was in school. It was considered a second home.

I sold it last year but needed to do a full rehab before I sold it. (He didnt take very good care of it) The rehab cost a little over 10,000 dollars not including my time.

Can I deduct these expenses on my taxes?

Thanks for any advice

Not exactly. Major repairs are not a deduction, but rather an increase in "basis". Therefore, since the home wasn't your primary residence for two of last last five years (or at least I am assuming that it wasn't) normally you would be paying capital gains tax on the difference between your basis and the sales price minus selling expenses. The 10k you spent on repairs would get added to your basis, therefore reducing your capital gain.

If you don't understand what I just explained, then use a professional tax preparer this year.