Hi,
We bought a central heater/air conditioner for our home in 2008 and was wondering if we could get a tax credit for the purchase? I've searched the IRS publication and on the internet but can't find a definite answer for the tax year 2008. It seems as if we had bought it in 2009 we would surely get a credit but not so sure for 2008.
So let's say that we can't claim it as a home improvement in 2008. But my wife works at home, so could we add it to the business expense?
Thanks!
It would be part of the home office expense calculation.
Thanks for the quick reply!
I assume that only a portion of the purchase/installation costs would be deductible. Do I just deduct the portion based upon the fraction of the home that is used for the office?
Yes. The common method is to divide the square feet of home office by the total square feet. However, as the air conditioner is an improvement (ie. an asset), it has to be depreciated, and when you sell your home you'll have to recapture the depreciation. The installation is an immediate expense and can I think be written off as an expense -- but of course, you'll only be writing off a portion of it based on square feet.
The installation is part of the cost of acquiring the asset and is depreciated just like the cost.
And when you get right down to the nitty gritty of the deal, the relatively small amount of an increased tax deduction of depreciation over next 39 years and pro rated on square footage, just ain't worth the aggravation of keeping up with it.
ChEAr$, Harlan Lunsford, EA n LA
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