Tax Question
I bought a 2nd home last year for 12k cash and have put about 10k more into it for repairs. I still own the property. Can I write off the 12k and all the repair costs? Whicjh form do I use? My wife is self employed and we use profit from businness form for that. Do I use a seperate form for the real estate?
thanx for any help
No tax write off. Repair costs for your second home are personal expenses, just as they are for your primary residence.
Because your repair costs are almost equal to the purchase price, it does seem that your "repairs", when lumped all together, constitute a renovation project. A renovation project is a capital improvement. In your case, I suggest you Increase your cost basis in the property by the actual out of pocket project cost for your renovation.
Your property purchase is never a tax write off, source of funds notwithstanding. All you are doing is exchanging one capital asset (cash) for another (equity in the property).
You have to give us a few more details. How are you "losing" $9K because of a gift of equity? How much was the equity you gifted?