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Cammarak

Active member
Joined
Sep 24, 2014
Messages
77
Reason
PALS
Diagnosis
06/2014
Country
US
State
NY
City
Williamsville
So I sold my house where my kids grew up(lots of angry tears there, thank you) and moved to a RANCH. Spending ALL my money renovating this ranch for my family. Putting in a basement apartment for my kids/mom and at some later point a home health care aid if a live-in is necessary. My question is to anyone else who has done this sort of thing--do you get a substantial tax break for this, or am I throwing away any money I could be saving for my family after I'm gone?
 
If what you are doing increases the value of the ranch, your family should benefit from that increase in value. I'll leave the tax break question to those who own homes, but in budgeting the renovations, keep in mind that paying for an aide will require substantial funds as well.

Best,
Laurie
 
I know of no 'tax break' for remodeling. If you used your home for business, a portion of operating/use expenses might be deductible as business expense, but I know of no way to deduct remodeling expenses. It might increase the value when sold or passed on...but might not too...and that increase likely wouldn't equal the expense for sure. Check with your CPA, I'm not one...just a business person who works out of the home some.

However. Fixing the place up to make things easier for you to be cared for in the future...is not throwing money away. This coming from a Past CALS point of view, having looked after my wife at home during her battle. There are certain things that make the house more user friendly from CALS point of view. Wide doorways, not just entry doors but most doors. Walk in shower...wide door, no step. Things like this will make things easier later. I'm sure others here will chime in if you need more ideas of things that help.

tc
 
As a CPA I can tell you that you need a complete financial plan. You can deduct only remodeling expenses that are directly related to making the house accessible (or adaptable for other medical reasons) and only to the extent that it does not improve the value of your house. For example, I spent around $50,000 making my house accessible by widening doors, putting grab bars around, completely gutting and renovating a perfectly good bathroom to make it wheelchair accessible, replacing all lights with LED, just to name a few things. I got an appraisal before the improvements and will get one after the improvements. Let's say my condo goes up in value by $20,000 and I spent $50,000. I can deduct the $30,000 as medical expenses but that will be reduced by 10% of my adjusted gross income. You can also deduct things like conversions on vehicles, ramps, lifts, and any other medical expense. Make sure you get a doctor's Rx to back up your expenditures. Also, get your doctor to write out an Rx for supplements you take and they are deductible as well if your doctor says they are medically necessary. Keep track of your mileage and hotel stays for medical purposes. It all adds up.

You cannot deduct improvements not connected with a medical expense. If you converted the basement to an apartment, that would not be deductible. Everything changes if you rent it out and claim the income from the rent.

This is just a very small piece of a comprehensive financial plan.

What does happen is that it increases the tax basis of your home which might come into play if and when it is eventually sold.
 
Kim's advice is great.

We did extensive renovations in our home. Converted the seldom used LR and DR to a downstairs bedroom and fully wheelchair accessible bathroom. Removed all the carpeting and tiled the whole thing. Roll-in shower, roll-under sink, elevated toilet with a bidet seat, grab bars everywhere. Widened all the doorways. Had a ramp installed in the garage. The only thing I can add to what Kim has already said is - Save ALL your receipts. It's daunting to try to remember what you spent on everything. We have our taxes done by a CPA, so it made his job easier too. We were able to take deductions for a great deal of what was done.

Good luck with your new home!
 
All of this is such great information! Thank you all--my dr. Will attest to the fact that a ranch was necessary, and the whole bathroom reno was to make it wheelchair accessible. Even the kitchen re-do was to create a space more accessible to someone in a wheelchair. I guess I was just a bit angry when I originally posted--whatever happens, happens. I'm just trying to keep up--if I can be a step ahead--well, that's just a bonus!
 
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