Comments on: Depreciating Additions for Home Business http://nslog.com/2007/03/10/depreciating_additions_for_home_business The Weblog of Erik J. Barzeski Sat, 11 Oct 2008 09:56:44 +0000 http://wordpress.org/?v=2.6.2 By: Erik J. Barzeski http://nslog.com/2007/03/10/depreciating_additions_for_home_business#comment-39954 Erik J. Barzeski Sun, 11 Mar 2007 15:37:11 +0000 http://nslog.com/2007/03/10/depreciating_additions_for_home_business#comment-39954 [quote comment="39953"]http://www.bankrate.com/brm/news/real-estate/20041018a1.asp[/quote] Good stuff. For some reason I thought you were taxed when you sold your home. I guess flippers can immediately deduct the cost of their goods, structural or otherwise.

http://www.bankrate.com/brm/news/real-estate/20041018a1.asp

Good stuff. For some reason I thought you were taxed when you sold your home.

I guess flippers can immediately deduct the cost of their goods, structural or otherwise.

]]> By: EJ http://nslog.com/2007/03/10/depreciating_additions_for_home_business#comment-39952 EJ Sun, 11 Mar 2007 15:25:57 +0000 http://nslog.com/2007/03/10/depreciating_additions_for_home_business#comment-39952 You can't instantly deduct the full price of the improvements because they've added value to your house. If you put in $15K to improve your office and then sell your house tomorrow, than presumably, you should get $15K more for your house. If so, the cost of the improvement was effectively $0. And since your office is in your your primary residence and you're planning to be there for more than two years, the government will never tax you on the appreciation you've realized due to your home improvements: <a href="http://www.bankrate.com/brm/news/real-estate/20041018a1.asp">http://www.bankrate.com/brm/news/real-estate/20041018a1.asp</a> So, it wouldn't be fare if the government allowed you to instantly deduct the $15K from your taxes since net cost of those improvements is far less than $15K. You can't instantly deduct the full price of the improvements because they've added value to your house.

If you put in $15K to improve your office and then sell your house tomorrow, than presumably, you should get $15K more for your house. If so, the cost of the improvement was effectively $0.

And since your office is in your your primary residence and you're planning to be there for more than two years, the government will never tax you on the appreciation you've realized due to your home improvements:
http://www.bankrate.com/brm/news/real-estate/20041018a1.asp

So, it wouldn't be fare if the government allowed you to instantly deduct the $15K from your taxes since net cost of those improvements is far less than $15K.

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