Remodel – Tax Deductions

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Using tax deductions from the cost of your remodel requires good planning and record keeping.

During our planning stage, I found a list of accessibility changes which are tax deductible.  The full publication can be found at:

http://www.irs.gov/pub/irs-pdf/p502.pdf

The list included the following:

– Entrance or exit ramps

– Handrails or grab bars

– Railings, support bars or other modifications to bathrooms

– Lowered or modified kitchen cabinets and equipment

– Moved or modified electrical outlets and fixtures

– Porch lifts and other lifts

– Widened doorways at entrances or exits

– Widened or modified hallways and interior doorways

– Modified stairways

– Modified hardware on doors

– Modified areas in front of entrance and exit doorways

– Ground grading to provide access to the residence

When our remodel was close to being finished, I used that list to create a personal list of changes made to the house and asked our contractor to fill in the amounts for those changes.  It looked like this:

Image (4)

Page 7 in the publication shows a chart to figure out how much the changes increased the value of your home.  Deductions can be made only on the amount  that did not increase the value of your home  (pages 18-20 in link above).  We had taken “before” movies and pictures.  When the project was completed, I asked our realtor to do a market analysis.  I showed her the “before” movies and pictures and then took her on a tour of the “after”.  She wrote us a letter indicating the values of both our before and after.  From that, we calculated the increase in value and deducted it from the cost of the remodel, leaving us with the amount we could use for tax deductions.  Taxes were filed and sent in with no problem; but had we been audited, we would have had plenty of paperwork to back up our numbers.  The deduction was well worth the trouble.

I also kept track of everything purchased that was energy efficient and had our contractor fill in the blanks for the cost of those items.   I gave instructions to the contractor to be sure to leave stickers on items or to give them to me when removed.  That list looked like this:

Image (3)

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Always keep track of purchases for mobility equipment, adaptations to dwellings and medical care and check IRS publications to guide you when preparing your tax  returns (or take your labeled receipts in if someone else is doing the preparation).

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About Climbing Downhill

Wife and mother of grown kids, in my 50's and dealing with MS, making life's moments count and trying to offer something of value to others along the way. https://climbingdownhill.wordpress.com
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7 Responses to Remodel – Tax Deductions

  1. Thank you for this great information. We’re looking into remodeling our bathroom and it never occurred to me that we could deduct some of the work from our taxes. You have all kinds of good information on your blog.

  2. I have secondary progressive MS, which means I used to experience attacks and then recover but now I am in a slow steady physical decline. We had the remodel done in 2010 with my future needs in mind – I wasn’t in a wheelchair then, but I am now. I am still able to use my scooter for limited amounts of time when out of the house, but I use my electric wheelchair at home most of the time. I can stand, but not walk. I am still able to transfer, dress and feed myself, but with increasing difficulty. My left hand doesn’t obey, and my right hand is following it so I use dictation software. Grateful every day for what I can still do.

    • I’m so sorry about your decline with this horrible disease. You have a good attitude and I know that you want to help others going through difficulties. Is your breathing compromised or your ability to swallow food…?

      • Minor breathing problem, no swallowing issue yet. From following your blog, I realize you may deal with more than I, but our journeys are similar as we battle not only our diseases but other aspects of the evil that caused them. Our hope is in something, someONE bigger, which you remind others of so well through your blog.

      • I’m glad that you can eat and speak and don’t need a breathing machine… Do you have a caregiver come in to help you? My wife is my primary caregiver, but for the last 8 years we’ve had a woman come in to give me a shower and do range of motion exercises…, which allows my wife to get out of the house.
        God is good, Kerri. I know that is true, and sometimes it’s the only thing I’m sure of. Focus on that in the difficult times.

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