Turns out that the Home inspection revealed a faulty hot water heater that would need to be replaced. In addition, the hot water tank had leaked causing damage to floorboards and carpeting, all of which will need to be replaced.
This couple asked whether, if they went through with the purchase of this home and made those repairs, they would be able to deduct those expenses.
- NEW IN 2015: PMI is tax deductible in 2015. What is PMI? PMI is private mortgage insurance – it protects the lender if you default on your loan. PMI is usually required if do not have at least 20% equity in your property. PMI expense will be deductible on primary and secondary homes.
· Added a sunroom at a cost of $100,000;
· Tore down a 1 car garage and replaced it with a 3 car garage for $75,000;
· Finished the basement at an expense of $100,000.