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Video instructions and help with filling out and completing Where Form 4797 Reduced

Instructions and Help about Where Form 4797 Reduced

Then I purchased a rental 38 k + 18 K for repairs when I sell the rental should the cost basis be the home oh I'm sorry should the cost basis of the home be 38 K or the cost plus repair and and I think we sometimes have differing opinions on this I'm kind of the opinion that if you buy a house on the cheap for $38,000 that with some improvements could be worth a lot more you're probably doing Capital One's capitalizable expenses so what Jeff is saying is there's two types of things of work you do on your house one adds to its useful life the other one is just to fix something right though it's repair versus renovation if you spent eighteen thousand dollars that does not sound like a repair that sounds like a renovation and you would add that to your basis so the cost basis would be increased if you are repairing something like a something was broken and you're just fixing it and you're not adding to the useful life of the actual property so like you're fixing a driveway or you're fixing the door those you wouldn't add to the basis you'd write those off immediately right and here's the trick there's a safe harbor that says if the invoice is less than $2,500 you can write it off absolutely and they can question it if it's I think it's up to 5,000 we were just talking about that where you have to get some sort of audited financial but right but but I'm not gonna go that route I'm just gonna say if it's less than 2500 so if you have somebody fixing up on your house have them make sure that they invoice you less than 2500...

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