Who Gets the Tax Write Off?

[Duckman 0]

I was hoping to get some feedback, I wanted to know if I was to enter an agreement where I would lease option to buy a property for 2 years, do improvements such as exterior paint, landscape, etc. would I be able to write these costs off at the end of the year or would they have to go to the owner? Is there a way to write a contract which would allow me to do this?

 

thanks

[Craig 0]

I was hoping to get some feedback, I wanted to know if I was to enter an agreement where I would lease option to buy a property for 2 years, do improvements such as exterior paint, landscape, etc. would I be able to write these costs off at the end of the year or would they have to go to the owner? Is there a way to write a contract which would allow me to do this?

 

thanks

 

Its my understanding the IRS maintains the one paying the taxes and mortgage gets the write offs. Now with a lease/option the one signing the check I would think gets the write off. If its paid to an escrow I would think that could change back to the leasee/buyer. I am sure this can be discussed further.

[Dave T 0]

I wanted to know if I was to enter an agreement where I would lease option to buy a property for 2 years, do improvements such as exterior paint, landscape, etc. would I be able to write these costs off at the end of the year or would they have to go to the owner?

Depends upon your circumstances. Are you using this house as your personal residence? Then, the answer is no. Capital improvements you make during your option period are added to the cost basis when you exercise your option. Repairs are personal expenses, for renters and homeowners alike.

 

If you are in a sandwich lease option, then capital improvements are still added to the cost basis. Repairs can be deductible business expenses on Schedule C and will offset your income.

 

 

Is there a way to write a contract which would allow me to do this?

Yes, but this is a legal question outside the scope of this forum. Consult your attorney.