Q. We’re adding a deck to our principal residence. Is any of the cost deductible? D.B.T. Sparta, N.J.
A. Not usually. There is no special deduction for the cost of home improvements, but you can add the expense to your basis in the home. This may reduce your taxable gain if you sell the home in the future to the extent that the gain exceeds the available home sale gain exclusion of $250,000 for single filers and $500,000 for joint filers. However, if you’re borrowing money to finance the deck, you may deduct interest paid on “home equity debt” of up to $100,000, absent any alternative minimum tax (AMT) complications.
Tip: Deductions for interest on home equity debt may be reduced for high-income taxpayers.
- Small Business Tax Deduction Strategies No matches