VACAVILLE, CA, Apr 26, 2024—Tax season is lurking right around the corner. As April approaches, many homeowners are wondering if their 2015 home improvements are tax deductible. The answer, however, is not so easy.
“Major home improvements are tax deductible,” says Stephen Spencer, Bev Dorsett & Sue and Steve Kappel, Broker/Owners of Coldwell Banker - Kappel Gateway, “but only after you have sold your home.” So while you may not be able to claim these deductions this year, Sue and Steve Kappel suggests you keep track of all improvements for the day you decide to sell.
But are you able to deduct all home improvements? According to the IRS, a tax-acceptable improvement is defined as one that adds value to your home, "considerably" prolongs your home's useful life, or adapts your house to new uses.
What improvements fall into this category? Examples, according to Sue and Steve Kappel, include new plumbing or wiring, or adding a bathroom. So while you can write off that first floor half bath, your new patio and swimming pool set-up likely won't count.
“If the work done on the home is purely for maintenance, the cost cannot be deducted and generally cannot be added to the basis, or value, of your home,” explains Sue and Steve Kappel. However, repairs done as part of an extensive remodeling or restoration of your home are considered improvements and, therefore, pass the deductible test.
For more real estate information, please contact Coldwell Banker - Kappel Gateway at info@kappelgateway.com, 707-427-5344, or Coldwell Banker - Kappel Gateway.