Can I write off repairs to a rental I want to sell if I’ve it owned for 20 years and it has been a rental most of this year?

by Colleen S. Krcelich, CPA | Oct 25, 2018

I have a rental property that I've owned for 20 years. I recently spent $6,000 in repairs to update it and rent it out again, but now I think I want to sell it. If I sold it before the end of the year could I still write off those repairs since it has been a rental most of the year?

Two things are in play here. First, were these repairs or improvements? Secondly, did you have it available for rent before deciding to sell it and after the repairs were done? 

If these were improvements, then the $6,000 becomes an asset, added to the cost basis of the property.

If these were repairs, and the taxpayer put the property back on the rental market and has proof, like rental ads, then the repairs can be deducted on Schedule E. If the property was not listed for rent after the repairs, the $6,000 gets added to the cost basis when sold.

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Answered by: Colleen S. Krcelich, CPA, is an adjunct professor at Northampton Community College in Bethlehem, Pa. 

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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