What sorts of records are necessary to keep relating to home improvements?
• If renovations are made to your home hat increase the value of that home, you may eventually be able to use these expenses towards tax savings. Although you cannot actually deduct these expenses on your tax return, you may add them to the original price of your home, which will help you, when you sell it. This will reduce the reported gain and the amount of capital gains tax you owe if you sell the house at a profit that exceed the capital gains exclusion, which is $250,000 for single filers and $500,000 for joint filers. Routine repair costs, such as painting, do not count. However, putting on an addition, new roof or installing a new sink does. IRS Publication 530, Tax Information for First Time Homeowners, can provide details about home-related tax deductions.
If renovations are made to your home hat increase the value of that home, you may eventually be able to use these expenses towards tax savings. Although you cannot actually deduct these expenses on your tax return, you may add them to the original price of your home, which will help you, when you sell it. This will reduce the reported gain and the amount of capital gains tax you owe if you sell the house at a profit that exceed the capital gains exclusion, which is $250,000 for single filers and $500,000 for joint filers. Routine repair costs, such as painting, do not count. However, putting on an addition, new roof or installing a new sink does. IRS Publication 530, Tax Information for First Time Homeowners, can provide details about home-related tax deductions.
