Correction - in previous post, it should state that SELLER agreed to provide a seller's concession credit
- posted
7 years ago
Correction - in previous post, it should state that SELLER agreed to provide a seller's concession credit
Person sells a house that had been used as a partial rental. That is, he lived in the home but rented out the upstairs portion (approximately 40% of the house living space) to two tenants. He always reported rental income and included a prorated portion (40%) of general house repairs as rental expenses.
The buyer's inspector identified some repairs and the buyer agreed to provide a seller's concession credit in the closing for the cost of these repairs. Can he deduct 40% of these repairs as rental expenses as he always did in the past? Does it matter that the last renters moved out a few weeks before the close date?
No. A seller's concession credit is a reduction in sales price. This adjusts the gain/loss on the sale. It isn't an expense.
Ira Smilovitz, EA
Rick: Was there depreciation "allowed or allowable" during the rental period?
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