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Updated almost 7 years ago,
House Hack Improvements on Personal Side - Tax Implications
Hello BP,
I recently did a small amount of improvement (<$1000) on one side of a duplex that I am now living in. Projects included installing vinyl plank flooring in two rooms, refinishing kitchen cabinets, and installing a new range hood as well as some basic painting. Now, I jumped into all of this without doing my research on how this will be reported on my taxes (doh!). I see now that all of that work should be considered personal for the time being and can't be reported on my taxes while I'm living there. However, I've already paid for all of these with my separate 'business' funds (where I keep my rental income/expenses). I'm also treating myself like a tenant by paying the normal rental rate into this account every month.
My questions are:
- Should I reimburse my 'business' account from personal funds because those expenses won't show on my tax return for 2017 or 2018?
- When I move out, what will I be able to deduct from the improvements I just finished and how will I do that?
- Is the 'paying myself rent' strategy sound or are there better ways to handle it for house hacking a duplex?
Thanks!
Caleb