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by Anonymous on December 3rd, 2006

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If I invest the capital gains from one residential rental in repairs and/or improvements on two other rentals can I reduce the amount subject to capital gains, and is there a time limit?

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  • by Eponymous on June 5th, 2007

    Eponymous

    You throw all the numbers together in the end....so why not? I own rentals and know for sure that you can write off the repairs/improvements put into rental property. That's something you can't do for your home....but you can write off interest payments for a home (even better).

    If you asking for justification to deduct it yourself and not show those numbers to the IRS, then it's a very bad idea. Report everything and if expenses override the gains - it all works out in the wash.

    The only time limit is that the expenses/gains had to come in the tax year you file. There might be exceptions here - I took losses from the sale of a business and my accountant was able to spread it out over a few years.

    Seriously....what I'd recommend if you are invested in real estate or even a small business is get a good accountant. It's so much easier to just send them the info - and they take the blame if something is shady. This stuff is too much of a headache to learn along with your real job.

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