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Deducting Building Repairs and Maintenance Expenses Deductions

  Sanjiv Gupta CPA  Published 
Deducting Building Repairs and Maintenance Expenses Deductions

Deducting Building Repairs and Maintenance Expenses Made Easy

Everything gets old with time and buildings are no exception. The inner structure, material and also the color starts to wear off with time. A person may think that his building is just perfect because it looks good from the outside or just because it is clean, but the internal structure of the building gets weak due to climate change and corrosion. Regular maintenance and repair work is essential in order to keep your home, office, studio, workplace or apartment strong. Unscheduled and sudden major repair needs in your building may disrupt your normal lifestyle and may also distract you from your preplanned activities. You can give your building repairs and maintenance work to a contractor who will set up a proper work schedule that does not disturb your work-flow.

While assigning your maintenance job to a contractor, always ensure that he is professional with proper work ethics and see to it that he maintains a work schedule. You cannot let your building maintenance work go on for several days. Look for a tender that includes the cost of materials, labor charges and date of completion. Once you are sure that the repair work is in safe and trustworthy hands, go ahead and make the deal.

When you need to repair your building, you can also deduct this repair and maintenance cost from taxable income. But the expenses must relate to the wear and tear or any other damage that is caused due to renting out your property. It could be repairing or replacement of a broken or discolored part of plumbing solutions or it could also be complete maintenance work like repairing the whole building and making it stronger in nature. Maintenance is fixing or preventing deterioration and this also includes painting the house, oiling the jammed doors or fixing water leakages. But not all expenses are claimable. The initial expenses in repairs and maintenance cannot be claimed at once. In order to make a property suitable for renting one cannot claim the tax cutter at once. These may include fixing any broken parts, putting up the walls, changing floors and also other fixing things. But when the property is up for sale, these costs can work out and help in deducing the tax paid. Repair work keeps the property in good condition and so the cost can be included in the deductible expense of the year.

Some of the exceptions where you cannot claim deduction are when you refurbish your kitchen or remodel your bathroom or renovate your property. A tax deduction can only be done if the expenses are absolutely important. As your property gets older, the value of your property depreciates. However, you can also claim a deduction in that. Documenting the actual cost of building repair and maintenance is very important. Using the same material as original should be maintained because higher quality material may be accounted for as improvement and IRS may not allow a deduction in that case.