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Daycare and Taxes>Past Home Improvements Question
legomom922 06:07 PM 03-20-2011
Ok Tom, you said I can put down past improvements, now I have a question. Do they get recorded in MMk under Home Improvements? But how does it get added to the value of my home? What happens since I have no reciepts or proof that thousands of dollars was put in this home before I moved in when I married my husband other than the purchase price vs the assessed value now. There had been a flood in the bottom part of the house (it is a split level) and everything was moldy, so my husband had to replace all the drywall, carpet etc. Everything had been under 3 ft of water, because of the sump pump and no electricity.
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Michael 06:20 PM 03-20-2011
Here is a previous post on deductions on home improvement: https://www.daycare.com/forum/showthread.php?t=28087

https://www.daycare.com/forum/showthread.php?t=26046
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TomCopeland 08:08 AM 03-21-2011
Since home improvements made before you went into business are included in the value of the home when depreciating the home, you don't depreciate them separately from the home. You can list them in MM as a home improvement if you want.
How do you estimate the cost with no records? Take pictures. Do you have pictures before the improvement? Can you contact the contractor who did the work to ask for records? Do you have a copy of the loan agreement that shows how much you borrowed for the improvements? List out all the work that was done (30 feet of drywall, 200 square feet of carpet, etc.). In the end, estimate the cost as reasonably as you can.
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legomom922 08:54 AM 03-21-2011
Originally Posted by TomCopeland:
Since home improvements made before you went into business are included in the value of the home when depreciating the home, you don't depreciate them separately from the home. You can list them in MM as a home improvement if you want.
How do you estimate the cost with no records? Take pictures. Do you have pictures before the improvement? Can you contact the contractor who did the work to ask for records? Do you have a copy of the loan agreement that shows how much you borrowed for the improvements? List out all the work that was done (30 feet of drywall, 200 square feet of carpet, etc.). In the end, estimate the cost as reasonably as you can.
I think I may be totaly out of luck with the past improvements...

There are no pics..none (ex destroyed & took everything, all pics, even ones of his kids) He has no baby pics!

No loans, all paid with CC from old accts that dont even exist anymore since divorce.

No contactors. Husband did all the work himself..

The only thing that would exist that he doesnt even have anymore either, would be like the paperwork from the purchase of the home, that may mention the homes condition and that it was a HUD home because of all the damage. I'm sure the Realor would have this?? Of course I would think that a reasonable person could also put 2 and 2 together and know that a house that was purchased for $76,000, in a area where homes sell for at least $130, and that same home is now worth $129, that extensive work must have been done. Or wouldnt they buy into that?

The only reciepts or bills that I have, is all the improvements that have been done since I have been living in the house.
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TomCopeland 10:01 AM 03-21-2011
Can you get a statement from the previous owner about the condition of the home? Does he/she have any old pictures?
Does your husband have an old credit card statements that would show purchases of materials? Are there any witnesses to the fact that he did this work (neighbors, friends)?
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Tags:deduction - home improvement, home improvement depreciation, home improvements
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