How to Deduct Home Improvements

Video Transcript

"Oh boy, do you end up spending as much time as I do at Home Depot? And then you think to yourself, my gosh, am I ever going to be able to deduct these home improvements? My name's Danielle Laughran. I'm a CPS with Accell and I'm here to tell you how you can use your home improvements for tax betterment, let's call it. Because unfortunately you can't actually deduct a home improvement. What you can do is add it to your taxable basis. That's your purchase price. I think it's easier if I just walk you through it with some numbers. Suppose that you bought your house for a hundred thousand dollars and you spent twenty thousand dollars improving your kitchen. Well, keep all the receipts and when it comes time to sell your house in a few years, suppose it's for a hundred fifty thousand dollars, you have a gain of thirty thousand dollars instead of a gain of fifty thousand. And there you go. You've saved yourself some money on back end by improving your house in the first place. My name's Danielle Laughran. I'm a CPA with Excel and I hope that I've helped you learn how your home improvement really can be a tax benefit."