With Tax time here, I thought I'd share a tip on things you can Deduct and Minimize your possible Taxes. If it's too late for your 2011 taxes, start doing it for your 2012 taxes!
Maintenance on a principal residence, the house you live in, is not a deductible, BUT, Improvements can add to the basis which can reduce the gain in the sale. Improvements are easily identified if they add to the value of a home, prolong its useful life or adapt it to new uses. Receipts and other proof, such as pictures, should be kept during ownership and for several years after the sale of the home.
A simple strategy is to put documents that affect the basis of the home in one envelope. Any receipt for money spent on the home that isn't the house payment or utilities, goes into the envelope. Your tax advisor will be able to sort through them to determine which are the capital improvements.
For more information on determining capital improvements, see IRS publication 523, and consult with your Tax Advisor.
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