Mobile Home Purchase
In Georgia, I purchased a mobile home for cash and have been renovating it to make it livable. What if anything can I claim on this for my taxes?
Comments
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Hi,
So there are some things you might be able to claim.
I’m going to include this publication from the IRS. It is specifically for homeowners and is a great resource: https://www.irs.gov/pub/irs-pdf/p530.pdf
Generally, on your taxes, the most common deduction you can claim is the mortgage interest deduction (which is an itemized deduction). If you have a loan for your home and for your expenses for renovating and fixing it up, you usually can claim the interest. (see page 6)
Another common deduction is the property or real estate taxes you pay on the home. (see page 4)
The cost of repairs and such generally are not tax deductible. However, if they are repairs to help improve the home, like getting a new roof, you can add that to the basis of the home. The basis is the original cost of the home (what you paid) and you can adjust the basis by adding the cost of those repairs to it.
This comes in handy if you sell the home in the future. You may be taxed on the gains of the home. So say you bought it for $100,000 (your basis) and sold it for $150,000. You would have a taxable $50,000 gain on the home. But say you got a new roof for 20,000 for the home. Your new basis would be $120,000 so your taxable gain would be $30,000 instead of $50,000. (page 17)
There are some more things to consider, like if you did home energy efficient upgrades or if you used your home for your business. But the above covers the most common scenarios.
