We moved from Florida to Tennessee last year. We improved house in florida before selling. We did not live in Florida house for full 24 months so we are being charged capital gains. We were told we could not claim remodeling/repair costs of house in Florida. Also when we moved to TN., after living in it for only a few months,we sold the first home(duplex)we purchased in TN.,to buy a house with a back yard.
We were informed by our tax prep lady the duplex could not be counted or we could not claim the loss on the house in Florida due to Tennessee tax laws.
Why are we unable to claim the cost of remodel on first house in Florida which includes home remodeling and cost of new water well. Can anyone help to clarify the real estate tax laws in state of Tennessee?
2007-02-16 22:44:35 · 5 answers · asked by country girl1 1 in Business & Finance ➔ Taxes ➔ United States
there are certain things you can claim on such as insulation or upgrading to green items (furnace, heaters, ect..). A little research you will find there is several things in remodeling you can use when filing.
I am in middle of remodeling and before I started I looked into these things on a tri- fold notion. Save money for one by being able to claim on my taxes, getting better efficent fixtures that are green and saves month to month on my bills, and simply to have a nice home.
2007-02-16 22:51:55 · answer #1 · answered by IndianaHoosier 5 · 1⤊ 1⤋
You can't deduct the cost of the home remodel job in FL, but you CAN add those costs to the cost basis of the home. This will reduce the gain on the sale.
I'm a bit confused by the "loss" claim on the sale in FL. You stated that you're paying capital gains tax but in the next paragraph you say the tax preparer says you can't claim the loss on the FL property. Which is it? Did you turn a profit on the FL property or did you have a loss? If you had a loss, you would not be paying any captial gains taxes. If you did have a loss on the FL property she is correct that you cannot deduct that loss; losses on the sale of a personal residence are never deductible.
There are 3 transactions going on here, and each one stands on it's own.
You CAN add the remodel costs to the cost basis on the FL property to reduce the gain. If you had a gain, you'll pay captial gains taxes on it since you didn't live there for 2 years out of the 5 prior to the sale.
The TN duplex is another purchase and sale. If you turned a profit, you will pay short-term capital gains taxes on it. If you had a loss on it, you cannot deduct the loss.
The second property in TN is just a purchase for now. You can deduct mortgage interest and property taxes as well as any points paid in 2006 towards the purchase-money mortgage that you took out to buy it.
If your tax preparer won't add the remodel costs to the cost basis on the FL property, find another tax preparer as she doesn't know what she's doing. If she's not allowing you to deduct a loss on any of the sales, she is doing it right since those are not deductible.
2007-02-16 22:59:24 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
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2016-10-15 12:20:28 · answer #3 · answered by ? 4 · 0⤊ 0⤋
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2007-02-16 22:56:29 · answer #4 · answered by SENG S 1 · 0⤊ 1⤋
Yes, but only after you've sold the house...
2007-02-16 22:47:38 · answer #5 · answered by Anonymous · 0⤊ 1⤋