Home Sellers Tax Tips For Capital Improvements


Many homeowners are looking for ways to help them sell their home, especially given the current real estate market. Fortunately, with some basic home improvements you might be able to not only draw increased interest from potential buyers, but add value and important tax benefits as well. Of course, anyone looking for home sellers tax tips should consult their tax professional; however, the costs of capital improvements that you make to your home can often be used to lower your taxes when it comes time to sell. This is certainly an important benefit for many home sellers.
For example, if you have a basement that is not finished, you might want to consider the benefits of completing this project. While a potential buyer could certainly purchase your home and make plans to finish the basement themselves, many buyers are not looking to purchase a home that requires a great deal of work. Additionally, if you finish the basement prior to putting your home on the market, you might be surprised at how much value this can add to your selling price. Of course, it is important to speak with a real estate professional and carefully weigh not only the cost of the project, but the anticipated increase in value along with any potential tax benefits.
It is important to realize that tax breaks can be confusing and do not necessarily apply to all homeowners. Additionally, just because you consider a specific project to be a capital improvement, the IRS might not see it the same way. Of course, anything you do to improve the function or aesthetics of your home can help increase the number of prospective buyers; however, not all home improvements will bring increased value.
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