Mortgage interest payments on acquiring and improving principal residences and second or vacation homes are fully deductible from income for tax purposes so long as the debt does not exceed $1 million. In addition, expenditures for permanent improvements can be added into your home's cost basis, or amount of money invested in a home, which reduces capital gains when it comes time to sell. Home-owners should save all receipts so they can include money spent over the years for permanent improvements, repairs after afire, flood or storm and special property tax assessments for neighborhood improvements. Capital gains are determined by the difference in price from the time a home is purchased and the time it is sold, minus the cost of any permanent improvements.
Tax-Deductible Home Improvements Expenses
Buying Tip Category: