All Forum Posts by: Winston A.

I amended my 2010 federal return for a incorrect Form 4562 item this past week. Would it be ok to file my 2011 federal return now, or do I have to wait until the IRS approves the amended return. Im pretty sure that the amended return is correct. Im trying to see what others would do in this situation.

Thanks in advance,

Winston

Hello Dave T,

I apologize for replying on an old thread. Regarding the cost basis of the example you gave. Would you put the cost basis of $225,000 on Sch. 4562? Or would you put half of that amount, $112,500?

Thanks in advance,

Winston

Thank you Steven, that was very helpful/insightful.

I made the $40,000 of improvements to my owner occupied floor from June 2010, and finished improvements in October 2010. Would that matter that the improvements were made to the floor that I was living on, the 2nd floor? When I purchased the building in May 2010, there was already a tenant living on the 1st floor, so I could not remodel that floor until January 2011, when the tenant moved in December 2010.

I completed remodeling the 1st floor in May 2011, and a new tenant moved in June 2011.

I did not include the $40,000 of improvements made in 2010 on my Federal tax return because I was told to add that amount to the basis when I sold the property. I also amended my 2010 return for another item, and I don’t think you can amend the return 2 times. Would it be wrong to add the 2010 improvements to my 2011 return since I finished remodeling in October 2010?

Also, I don’t see a line item for improvements on form 4562. Can I just add the 2010 & 2011 improvements to the cost basis, multiply that amount by 50%, and report on line 19h? I dont see any other line item to report improvements? If not, how would I report the 2010 & 2011 improvements on form 4562? Would I just include an attachment? And can I just combine the 2010 & 2011 improvements, and depreciate that amount? Or would I list out both improvement?

One last thing, of the $20,000 of improvements made in 2011, $10,000 was labor paid by personal check to the guy that did the remodeling. Can I include this in the basis? Or should I leave it out?

Thanks in advanced for your help. I appreciate it very much.

Winston

I bought a 2-floor building in 2010 for $200,000. I live on the top floor. Currently there is a tenant on the 1st floor. I only plan to live in building for 5 years, and rent out the whole building for another 10 years.

I made improvements of $40,000 to my floor in 2010. There was a tenant on the first floor. Do I add the $40,000 to the cost basis when I sell the property? Or can I add $40,000 to the cost basis and depreciate the new basis? I would like to get the most depreciation now. The whole building will eventually be rental property when I move out in 5 years. Is this incorrect since I live on top floor where I made the improvements?

Purchase price: $200,000
Less: Land $25,000
Building Basis: $175,000
Add: Improvements: $40,000
Adjusted Basis: $215,000
Rental Portion: 50%
Adjusted Basis: $107,500 - To form 4562?

In 2011, I made another $20,000 in improvements to the renter's portion of the building. The renter moved in June 2011. Can I add the improvements to the $107,500 adjusted basis from 2010 (assuming 2010 basis is calculated correctly) and depreciate this new amount for 2011?

2010 Adjusted basis: $107,500
2011 Improvements: $20,000
Adjusted Basis: $137,500 - To form 4562?

Thank you all that replied. This was very helpful. I will take all info to my CPA.

Best regards.

Thank you Dave. That was very helpful.

One last question, when I add the 40K to my basis, do I add it this year on my tax return, and depreciate that new adjusted amount? Or do I add it to the basis when I sell my property?

Thanks in advance.

Even though it was done on my personal residence and not to the actual rental unit?

Thanks in advance.

I occupy 1/2 of my rental property, and rent out the other half. I spent $20K on repairs/supplies/materials & $20K in labor on my personal residence of the rental property.

I only plan on living here for 5 years, then renting out the whole property Can I deduct any of this on my 2010 tax return? or is all this lost money since it was spent on my personal residence.