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Posted by Rick Blaine on January 21, 2008, 7:07 pm
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>What basis? He's selling the property, not buying it. I would add it to
>the cost of the sale.
Yes, clearly it could be considered a transaction expense along the lines of
appraisals, seller warranties, last minute repairs, title costs, etc. What I was
wondering is if there were special provisions for state sales taxes on the
transaction.
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Posted by Phil Marti on January 21, 2008, 9:12 pm
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"Rick Blaine" wrote:
> Yes, clearly it could be considered a transaction expense along the lines
> of
> appraisals, seller warranties, last minute repairs, title costs, etc.
Repairs are not an allowable expense of sale.
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Phil Marti
Clarksburg, MD
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Posted by Harlan Lunsford on January 21, 2008, 9:32 pm
Please log in for more thread options Phil Marti wrote:
> "Rick Blaine" wrote:
>
>> Yes, clearly it could be considered a transaction expense along the lines
>> of
>> appraisals, seller warranties, last minute repairs, title costs, etc.
>
> Repairs are not an allowable expense of sale.
>
What if this "residential property" is investment property and not
personal residence?
ChEAr$,
Harlan Lunsford, EA n LA
--
<< ------------------------------------------------------- >>
<< 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. >>
<< >>
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Posted by Phil Marti on January 22, 2008, 12:56 am
Please log in for more thread options "Harlan Lunsford" wrote:
>> Repairs are not an allowable expense of sale.
>>
> What if this "residential property" is investment property and not
> personal residence?
If it's a rental, fix-up repairs are deductible on Schedule E as repairs,
not as a cost of sale.
If it's non-rental investment property, repairs would be a cost of
maintaining it. Without looking it up, I'm not sure how that's treated, but
my guess would be a Schedule A miscellaneous itemized deduction for
investment expenses.
My point was to address the longstanding misconception that fix-up expenses
prior to sale of a personal residence have ever (at least since 1971) been
deductible. Many people got confused because of the old rules for deferring
gain on such sales, which allowed you to consider these expenses in
determining the required cost of the new residence, but didn't allow them in
the calculation of gain.
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< 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 Harlan Lunsford on January 22, 2008, 4:02 pm
Please log in for more thread options Phil Marti wrote:
> "Harlan Lunsford" wrote:
>
>>> Repairs are not an allowable expense of sale.
>>>
>> What if this "residential property" is investment property and not
>> personal residence?
>
> If it's a rental, fix-up repairs are deductible on Schedule E as repairs,
> not as a cost of sale.
If it is STILL a rental. However sometimes a property ceases to be a
rental property and just sits around until sold, in which case these
repairs would form part of basis and thereby reduce gain.
>
> If it's non-rental investment property, repairs would be a cost of
> maintaining it. Without looking it up, I'm not sure how that's treated, but
> my guess would be a Schedule A miscellaneous itemized deduction for
> investment expenses.
I think these expenditures would properly be capitalized.
>
> My point was to address the longstanding misconception that fix-up expenses
> prior to sale of a personal residence have ever (at least since 1971) been
> deductible. Many people got confused because of the old rules for deferring
> gain on such sales, which allowed you to consider these expenses in
> determining the required cost of the new residence, but didn't allow them in
> the calculation of gain.
Yes, I knew what your point was of course. And well taken, too.
ChEAr$,
Harlan Lunsford, EA n LA
--
<< ------------------------------------------------------- >>
<< 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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