Can I receive tax benefits on home improvement or do I only receive these benefits once I sell? Also, if I sell prior to the required 2 years for the capital gains tax benefit, do they prorate for the time l lived in the property, or is it 'all or none'?
2007-04-08 15:12:41 · 4 answers · asked by SPR 1 in Business & Finance ➔ Taxes ➔ United States
look here http://www.irs.gov/publications/p936/ar02.html#d0e2014
2007-04-08 15:16:33 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Depends on the home improvements that you did. Certain improvements to your home, ie, windows, insulations, doors, furnace, are eligible for a tax credit for 2006. Form 5695 - Residential Energy Credits would give you the specifics on what credits are available. If there is a good reason why you had to sell your property before the required 2 years then yes, you can prorate for the time you lived in the property, but if you're selling because you think you can make a good profit while the housing market is still semi-good, than no you would not be able to prorate the time.
2007-04-08 15:20:32 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Tax benefits for most home improvements are taken when yu sell. There is a residential energy credit available for certain improvements - that is taken the year you make the improvement.
Normally, if you didn't meet the two year rule, you wouldn't be able to exclude the gain, but there are some exceptions where you can prorate the exclusion, such as a more for job or health reasons.
2007-04-09 03:36:39 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
It is all or none. The 2 years out of the past 5 is a qualifier and either you qualify or you don't. Since there is no income from the home, at present, there is no way to deduct expenses connected with the home, thus the bit about not getting tax benefits from home improvement unless and until you sell and have a gain.
2007-04-08 15:17:14 · answer #4 · answered by Still reading 6 · 1⤊ 1⤋