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Question
Hello John,

My wife & I have another house which I started to do some repairs last year with the purpose of renting it. The receipts are dated 2012. But we had other things going on, and weren't able to focus in the repairs and get them finished, and rented in 2012. So here we are with a bunch of expenses from 2012, but no income from rental. Is there a way to take some advantage from those expenses in out 2012 personal income tax?. Otherwise, if we rent the house during 2013, will we be able to somehow claim all those expenditures in our 2013 personal income tax?

Thank you in advance,


Richard

Answer
Richard,

Thanks for your question.

The expenditures for the repairs should be deducted in the period in which they were paid.  Thus, if you made a repair in 2012 and paid for it then, you should deduct it on your 2012 return.

You must be careful to distinguish between a repair and an improvement.  An improvement is something that extends the life of the house, or adds something to it.  A new room, a new roof, a central air conditioning system are examples of improvements.  These should be capitalized and depreciated over the life of the asset.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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