Tax writeoff rennovations on a duplex with a FHA loan?
I recently purchased a duplex and in order to do so I used an FHA loan. The FHA loan requires me to have one of the units as my primary residence for a minimum of 1 year from my move-in date. I plan on moving out as soon as the year is up so I can rent the entire duplex out to collect income off of it. Since I reside in one side can I only expense the depreciation of 1/2 the purchase price over 27 1/2 years within the first year? Is there a way that I can depreciate the entire purchase price after I move out and rent out both units? Also if I want to make "regular" maintenance rennovations to my side (paint, siding, drywalling, carpet, etc) within the first year I am living there is there any way that I can expense that off of my income?....I read this in an article regarding a question kind of similar to mine: If a paint job is part of a major remodeling of the entire property, it -- and the rest of the remodeling -- would be treated for tax purposes as a capital improvement. That means the expense would have to be depreciated over a 27 1/2-year period, beginning when the project is completed. Can I declare my major remodeling of the entire duplex starting this year, keep all of my receipts for the entire remodel and then declare it completed the day I move out and its rented to someone else and expense everything after that? I am hoping there is a gray area or crack I can slip through in the ruleing on expensing rennovations I do this year, as it is much easier to do them while im living there. Any help on this is appreciated.....
Asked By: - 12/22/2011
Best Answer - Chosen by Asker
I would suggest a consultation with a local CPA or EA who specializes in small business taxation with some emphasis on rental properties... More
Answered By: Bash Limpbutt's Oozing Cyst© - 12/22/2011
Additional Answers (3)
You can start including expenses for your side once you move out. If you move out in Nov or Dec then it is only 1 or 2 months worth. Any improvements done before you move out may be added to your basis. General maintenance on your home is not deductible.
Answered By: Cathi K - 12/22/2011
No, you can't "declare" anything into the Internal Revenue Code... More
Answered By: mrreliable3599 - 12/22/2011
what you do while you are living in it is 'living expenses' and not deductible... More
Answered By: tro - 12/22/2011
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