About IRS Deductions for Home Repairs and Remodeling

For most people, the Internal Revenue Service does not offer a tax deduction for repairs or improvements to a home, but some exceptions apply. Repairs refer to work done to keep the home in livable condition, while improvements refer to projects designed to add value to the property.

Increased Basis

Most taxpayers can only claim an increased tax basis in their home for the cost of improvements and receive no tax benefit for repairs. However, if a taxpayer includes a repair as part of a larger improvement, such as replacing old pipes when remodeling the bathroom, those costs can be included as improvements.

Medical Expenses

If a medical condition makes a home improvement necessary, such as adding a chair lift on the stairs, the cost can be added to your medical expenses deduction. This allows you to deduct the amount of medical expenses that exceeds 7.5 percent of your adjusted gross income.

Rentals

If you rent your home out, you can deduct the costs of repairs against your rental income in the year that you pay them. If you pay for home improvements, you must amortize them over their useful lifespan. For example, the cost to repaint a wall would be deductible as a rental expense, but the cost to build a new room would be deducted over its useful life.

References

• IRS: Publication 523
• Investopedia: Tax Deductions for Rental Property
• Web Tax: Can I take a tax deduction for home repairs or home improvements on my tax return?