{"id":19673,"date":"2023-06-14T00:21:58","date_gmt":"2023-06-14T00:21:58","guid":{"rendered":"https:\/\/woodriverweekly.com\/?p=19673"},"modified":"2023-06-13T20:23:28","modified_gmt":"2023-06-13T20:23:28","slug":"avoid-taxes-by-keeping-track-of-improvements","status":"publish","type":"post","link":"https:\/\/woodriverweekly.com\/index.php\/2023\/06\/14\/avoid-taxes-by-keeping-track-of-improvements\/","title":{"rendered":"Avoid Taxes by Keeping Track of Improvements"},"content":{"rendered":"

BY ANNA & MICHELLE<\/em><\/p>\n

Keeping track of capital improvements to your home can help you avoid taxes later down the road when you sell it.<\/p>\n

Some homeowners don\u2019t even consider such a thing because they are aware of the capital gain exclusion of up to $500,000 for married homeowners and $250,000 for single filers.\u00a0Possibly, the gain in a past sale didn\u2019t exhaust the limit that has remained the same since 1997.<\/p>\n

Today, homes are much more expensive and appreciation in the past few years has been exceptionally high.\u00a0It is now possible and maybe more likely, based on the price of the home, for a homeowner to have gains more than these limits.<\/p>\n

A $250,000 home in 1997, based on an annual appreciation of 4%, would be worth almost $700,000 today.\u00a0Capital improvements made to a home raise the basis, or cost, of the home, which will affect the gain on the sale.<\/p>\n

Improvements must add value to your home, prolong its useful life or adapt it to new uses.\u00a0Repairs, not considered improvements, are routine in nature to maintain the value and keep the property in an ordinary, operating condition.<\/p>\n

The addition of decks, pools, fences, and permanent landscaping add value to a home as well as new floor covering, countertops and other updates.\u00a0Replacing a roof, appliances or heating and cooling systems would be considered to extend the useful life of the home.\u00a0Completing an unfinished basement or converting a garage to living space are common examples of adapting a portion of the home to a new use.<\/p>\n

Other items that can raise the basis in your home are special assessments for local improvements like sidewalks or curbs and money spent to restore damage from casualty losses not covered by insurance.<\/p>\n

There can be multiple ways to create a capital improvement register.\u00a0Homeowners could use a spreadsheet where they record the date, description, and the amount of each improvement while they own the home.\u00a0It is also necessary to keep receipts for the expenditures and cancelled checks for proof.<\/p>\n

Just keeping the receipts and cancelled checks would be helpful and could be sorted through by yourself or an accountant at the time of filing the tax return after the sale of the home.\u00a0Since most banks don\u2019t return cancelled checks any longer and the sale could be years after you\u2019ve closed an account, it would be prudent to acquire a \u201csubstitute check,\u201d which is a paper copy of the canceled check.\u00a0Another option that may be available through your bank is to download a picture of the cancelled check.<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

BY ANNA & MICHELLE Keeping track of capital improvements to your home can help you avoid taxes later down the road when you sell it. Some homeowners don\u2019t even consider such a thing because they are aware of the capital gain exclusion of up to $500,000 for married homeowners and $250,000 for single filers.\u00a0Possibly, the […]<\/p>\n","protected":false},"author":1,"featured_media":19674,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","_pvb_checkbox_block_on_post":false,"footnotes":""},"categories":[64,38],"tags":[],"class_list":["post-19673","post","type-post","status-publish","format-standard","has-post-thumbnail","category-better-homeowners-news","category-sponsored"],"_links":{"self":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/19673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/comments?post=19673"}],"version-history":[{"count":1,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/19673\/revisions"}],"predecessor-version":[{"id":19675,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/19673\/revisions\/19675"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media\/19674"}],"wp:attachment":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media?parent=19673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/categories?post=19673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/tags?post=19673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}