My husband and I moved into my sister's home to help her out for a year. We pay rent, and he has done quite a lot of work on the house, including the purchase of building materials, paint, etc... Is his labor and cost for materials, tax deductible...and if so, where could he claim this?
2007-04-09 12:15:57 · 4 answers · asked by Lisa E 6 in Business & Finance ➔ Taxes ➔ United States
Rent paid for a personal residence, regardless of whether one lives in a relative's home, is generally not deductible. The same would apply if you were renting your own personal residence. This would include any "value" attributed to work done on the property in lieu of, or in addition to, rent. One possible exception, which doesn't sound like it applies, might be a deduction for a portion of the rent (including additional costs if they don't exceed the rent), IF you maintain an office in that home for your own business purposes. The rules for deducting Office in Home expenses are stringent, and I don't advise trying to dream up a business purpose where one does not exist. Go to the IRS's web site at www.irs.gov and look for the publication dealing with Office in Home expenses. I doubt that you'll qualify for any deduction using those rules. The answer, generally, is "No, such costs are not deductible."
2007-04-09 12:34:59 · answer #1 · answered by byu1980 2 · 0⤊ 2⤋
The only way repair costs are deductible is by the landlord against rental income. In your case your sister would have to include the value of the repairs as rental income to deduct the repair costs. The net result is a wash. Technically, she should be declaring the rent you pay as income now. Are you sure you are paying rent and not just sharing the cost of maintaining your joint home? This MAY be open to interpretation with relatives living in the same house. The taxes are simpler is you are not renting.
2007-04-09 19:49:58 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
Just as you state it -- no it is not tax deductible.
Now, if he is a licensed contractor and has a business then of course the cost of material could be tax deductible. However, the hassle to creating a business if this is the only thing he has done will cost you more in taxes than is worth setting it up.
2007-04-10 17:15:22 · answer #3 · answered by Tom T 3 · 0⤊ 0⤋
No, none of that is tax deductible. He can "claim" it from his sister but that's about it.
2007-04-09 19:21:58 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋