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Posted by 0b3hks001 on July 11, 2008, 2:06 am
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I am looking to renovate my home, and relocate to short-term rental
(3-4 months) durng the process. Can the rental cost be considered as
part of home improvement cost and added to the cost basis?
TIA
========================================= MODERATOR'S COMMENT:
- nice try, no.
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Posted by Bill Brown on July 11, 2008, 10:17 am
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On Jul 11, 2:06 am, 0b3hks...@sneakemail.com wrote:
> I am looking to renovate my home, and relocate to short-term rental
> (3-4 months) durng the process. Can the rental cost be considered as
> part of home improvement cost and added to the cost basis?
>
No. The rental activity is shown on Schedule E (revenues and
expenses). If there's a rental gain, you pay taxes on it. If there's a
loss, maybe you can deduct all or some of it depending on your income
from other sources.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Gil Faver on July 11, 2008, 11:35 am
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> On Jul 11, 2:06 am, 0b3hks...@sneakemail.com wrote:
>> I am looking to renovate my home, and relocate to short-term rental
>> (3-4 months) durng the process. Can the rental cost be considered as
>> part of home improvement cost and added to the cost basis?
>>
>
> No. The rental activity is shown on Schedule E (revenues and
> expenses). If there's a rental gain, you pay taxes on it. If there's a
> loss, maybe you can deduct all or some of it depending on your income
> from other sources.
Personal rental costs can be deducted on Schedule E? If so, I'm moving to a
fancy place to offset some of my rental income. Details, please! ;)
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on July 11, 2008, 12:39 pm
Please log in for more thread options Gil Faver wrote:
>> On Jul 11, 2:06 am, 0b3hks...@sneakemail.com wrote:
>>> I am looking to renovate my home, and relocate to short-term rental
>>> (3-4 months) durng the process. Can the rental cost be considered as
>>> part of home improvement cost and added to the cost basis?
>>>
>> No. The rental activity is shown on Schedule E (revenues and
>> expenses). If there's a rental gain, you pay taxes on it. If there's a
>> loss, maybe you can deduct all or some of it depending on your income
>> from other sources.
>
>
> Personal rental costs can be deducted on Schedule E? If so, I'm moving to a
> fancy place to offset some of my rental income. Details, please! ;)
>
I think there was a misunderstanding on who is renting what.
To the OP, not only is the cost of the personal rental not added to the
basis of the house, but if you borrowed money to pay for the renovation
and are using part of the loan proceeds to also pay the short-term
rental, that part is equity debt, not acquisition debt, so future
deductions of the mortgage interest may be limited by the usual rules
for equity vs. acquisition debt.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Bill Brown on July 11, 2008, 10:49 pm
Please log in for more thread options > Gil Faver wrote:
> >> On Jul 11, 2:06 am, 0b3hks...@sneakemail.com wrote:
> >>> I am looking to renovate my home, and relocate to short-term rental
> >>> (3-4 months) durng the process. Can the rental cost be considered as
> >>> part of home improvement cost and added to the cost basis?
>
> >> No. The rental activity is shown on Schedule E (revenues and
> >> expenses). If there's a rental gain, you pay taxes on it. If there's a
> >> loss, maybe you can deduct all or some of it depending on your income
> >> from other sources.
>
> > Personal rental costs can be deducted on Schedule E? If so, I'm moving to a
> > fancy place to offset some of my rental income. Details, please! ;)
>
> I think there was a misunderstanding on who is renting what.
>
Sure was. I do have to start reading all the words, not just every
other one. :(
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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