Your Tax Questions Answered
Turning Renovations into Tax Breaks
Kiplinger editorial director Kevin McCormally and fellow tax experts Peter Blank and Mary Beth Franklin tackle your most pressing tax challenges.
By Kevin McCormally, Editorial Director, Kiplinger.com
February 19, 2010
QUESTION: We are doing a full remodeling of our vacation home in Arizona and of course that means getting rid of old doors, windows, fixtures, appliances etc. Can you tell what, if any, is tax deductible if we’re donating all the materials?
KEVIN ANSWERS: If you give the items to a qualified charitable organization, you can deduct as a charitable contribution the fair market value of the materials at the time of the gift. The used household items must be in at least good condition. If any single item or group of similar items is valued at over $5,000, you have to have a professional appraisal to back up your estimate.
You might also find IRS publication 561 helpful in determining the value of the donated stuff.
QUESTION:
I am a homeowner who remodeled my kitchen, built an office, and did many other home improvements and repairs. None were for energy saving I but spent thousands in materials. Are my homebuilding materials sales-tax deductible? If so how do I file?
KEVIN ANSWERS: The sales taxes are deductible for personal home improvements only if you itemize and hoose to deduct sales taxes rather than state income taxes on your federal return. The IRS offers a table estimating sales taxes based on income and family size and, if you use the table amount, you can add the sales tax paid on home building materials. See this article from the IRS for more details.
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Reader Comments (5)
Posted by: Terri at 02/22/2010 08:26:23 AM
I drive 150 miles round trip to work every day. Which means roughly an oil change every month. Can I deduct the mileage and/or cost of maintenance on my taxes?
Posted by: Laura Beth Matson at 02/22/2010 12:16:18 PM
Can I deduct all of the home improvement expenses that I encounter while improving a rental property?
Posted by: C.A.M.P. Foodservice at 02/22/2010 12:26:19 PM
I own and operate a small food service management company out of my house. My house is an old, rambling 1850's era farmhouse, and currently has three rooms insulated off, but attached to, the rest of the house. We do not currently use these rooms and they need A LOT of work to be usable. Is it possible to renovate these rooms to use as a home office, and if so, how much of the initial cost of rehabbing these rooms to use as a home office will be tax deductable?
Posted by: Tim at 04/11/2010 09:28:01 AM
I live in New York and am ready to e-File my taxes. I owe the Feds $9000 and New York $3000, is there any last minute contributions I can make to College for children, gifts to my children, or to IRAs for my wife and I to lower the amount that I will may in taxes? Thanks, Tim
Posted by: Will at 07/13/2010 11:45:16 PM
Concerning the first question on this page. Yes, the old materials can be donated for a deduction. But another question must be asked, is an energy credit being taken for the new material being put into the house? If so, the old must be destroyed.