VGC Dues/"reserves" for 2011-2013

[stat]

Some of these do appear to increase the cost basis.

https://www.irs.gov/pub/irs-pdf/p523.pdf

Agreed, I have a rental property and there's a big difference between regular maintenance (one-year deductible expense against that year's revenue) and capital expenses (which adds to my cost basis for the eventual sale). I've always thought of these as corresponding to the Maintenance line and the Reserves line but it's possible it's not that clean.

It's tempting to file the profit/loss as "sale price minus original purchase price," but I'm guessing his CPA is trying to follow the tax code a little more literally (not saying he's correct but seems like a valid approach).

 

[AnnaKristoff2013]

Reserves is just normal upkeep and maintenance, which would generally not be considered tax deductible.

It’s not that it’s tax deductible. It’s that, under certain circumstances, it doesn’t count towards the capital gain from selling the contract at a profit.

Edit: I see others commented on this more prior to my post.

 

[AstroBlasters]

It’s not that it’s tax deductible. It’s that, under certain circumstances, it doesn’t count towards the capital gain from selling the contract at a profit.

Edit: I see others commented on this more prior to my post.

Fair. I ment to say that it would not adjust the basis higher and therefore lower the amount of capital gain.

Just like replacing appliances or flooring in your residence wouldn’t increase the basis.

 

[Brian Noble]

Just like replacing appliances or flooring in your residence wouldn’t increase the basis.

Except that they can. That IRS publication I linked to above specifically includes flooring in the set of improvements that contribute to cost basis, as are built-in appliances.

 

[VGCgroupie]

Except that they can. That IRS publication I linked to above specifically includes flooring in the set of improvements that contribute to cost basis, as are built-in appliances.

I having to deal with this next tax season for the sale of a home.. the lines for built in appliances are so blurry. Technically all appliances can be moved.

 

[Brian Noble]

Yeah, I'm not sure what counts as "built-in" but as I am not currently a member of the landed class I don't have to figure it out!

The last home I owned inlcuded an in-wall double-oven. I would guess that if anything counted, that would, but that's why tax professionals exist.